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Randgold Resources cheers rising profits after record production levels

Precious metals miner Randgold Resources has cheered rising profits after record production levels and a drop in costs helped bolster performance.

The London-listed firm said profits leapt 38% to 294.2 million US dollars (£236.2 million) in the year to the end of December 2016, with total cash cost per ounce falling 6% year-on-year.

Gold sales also pushed ahead, rising 11% to 1.55 billion US dollars (£1.2 billion) over the period, while production rose more than 3% to a record high of 1.25 million ounces.

Chief executive Mark Bristow said the firm had beaten its net cash target for 2016 and secured 516.3 million US dollars (£414 million) in the bank, with no debts.

"We have shared with the market our 10-year plan, which shows how we plan to sustain our profitability over the next decade at a gold price of 1,000 US dollars per ounce," he added.

"It also envisages, but does not depend on, the development of three new mines over the next five years."

Shares closed up more than 4% on the FTSE 100 Index, as the firm also outlined plans to hike the dividend by 52% to 100 cents per share.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said the enormous dividend hike was what made the firm attractive to investors.

"U nlike most gold investments, it pays investors to wait, albeit not very much," he added.

"The group has once again demonstrated its ability to keep a firm grip on costs, even as production increases, and is taking steps to refresh the portfolio.

"However, while the group's high-quality, low-cost mines aim to be profitable at 1,000 US dollars an ounce, a price we haven't seen since the financial crisis, it remains a play on the gold price, and that brings risks."

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