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Randgold reports increased production

Steve Clayton | 6 August 2015 | A A A
Randgold reports increased production

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Randgold Resources Ord US$0.05

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Second quarter results from the gold mining company saw profit rising by 15% when compared to the first quarter, although falling when contrasted with the second quarter last year. An 8% drop in the average gold price received compared to the year ago quarter (Q2 2014: $1 290/ounce) played its part, while a 7% rise in group production over the previous quarter to top the 300 000 ounce mark for the first time also contributed.

The Chief Executive noted that "the results showed a business that stood strong in a sector that was buckling under the pressure of the gold price downturn.  It was particularly significant, he said, that in an environment of radical cost-cutting, Randgold was able to continue investing in its capital projects while also strengthening its balance sheet. At the end of the quarter, the company had cash of $109.2 million and no debt on its books." The share price was little changed in mid-morning UK stock market trading.

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Highlights:
  • Record group quarterly gold production
  • Cash cost per ounce down quarter on quarter and on corresponding 2014 quarter
  • Profit up 15% quarter on quarter but down on corresponding 2014 quarter on the back of lower gold price
  • Balance sheet remains strong according to management

Outlook:
The Chief Executive noted that "In the 20 years of Randgold's existence, we have made no material changes to our core strategy, but the refinements we introduced when we saw the downturn coming, and the fact that our business models were prudently based on $1 000 per ounce, are enabling us actively to manage the weakening gold price.  At the halfway mark we remain on course to achieve our market guidance for 2015."

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