[miningmx.com] — RANDGOLD Resources didn’t escape the knock-on
effects of the recent military coup in Mali, with production down almost a fifth at the
group’s key assets in the West African country and costs rising significantly as a
consequence.
This came after the government of former Malian President Amadou Toumani Toure
was overthrown on March 21 by the country’s military. However, a settlement was
reached over the Easter weekend when the junta agreed to reinstate the constitution.
Reporting financials for the first quarter of 2012 on Thursday, Randgold said gold
production at its flagship Loulo-Gounkoto complex in Mali was down 18% on the
previous quarter. Yet, CEO Mark Bristow said this fall was rather a consequence of
grade (down from 4.5g/t to 3.4g/t) and operational issues than disruptions related to
the coup.
Randgold recorded profits from mining activities to the tune of $82.9m at the
complex, albeit down from $119.5m in 2011’s final quarter.
As for the coup, Randgold said it held no more than a temporary disruption to the
mine’s supply chain. Bristow said recoveries should improve further following the
commissioning of a third mill, which has ramped up to 330,000 tonnes per month. A
phased expansion to 450,000 tonnes per month, at a capital cost of $120m, is being
considered at the moment.
What concerns Bristow more is Randgold’s Tongon mine in Ivory Coast.
“Our biggest single operational challenge is getting Tongon to settle,’ Bristow said,
pointing to having to deal with transitional ore, stabilising a power link to Ivory
Coast’s national power grid and labour problems.
Gold ounces produced were up 6% to 48,887 oz, yet this came on the back of a 24%
increase in tonnage processing, implying lower grades (2.4g/t vs 2.7g/t in December)
and recovery (80%).
Grade also dropped at the Morila joint venture in Mali, where production fell 21% to
54,631 oz. The head grade mined was down from 2.1g/t to 1.6g/t, but Randgold said
this was due to the processing of mineral waste. Cash costs were down 11% to
$669/oz due to processing the said waste, which didn’t carry any cost of mining.
At Kibali, Randgold’s joint venture with AngloGold Ashanti in the Democratic Republic
of Congo, development commenced during the March quarter and is on track to start
producing its first gold by the end of 2013.
Overall, earnings per share of $0.97 was down 27% quarter-on-quarter and lower than
the consensus forecast of $1.11. Production totalled 165,443 oz at a total cash cost
of 751/oz, up from December’s $682/oz.
Randgold Resources’ LSE-listed shares traded down 1.96% around noon at £52.45.
