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Randgold - Higher gold prices & lower costs offset low production

Nicholas Hyett | 4 May 2016 | A A A
Randgold - Higher gold prices & lower costs offset low production

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Randgold Resources Ord US$0.05

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Randgold shares have opened 4.5% down this morning, after operational difficulties led first quarter production to fall 11% versus Q415. However, higher gold prices relative to the previous quarter helped to boost profits by 19%, lifting earnings per share to $0.58 (Q415: $0.48).

On an annual basis profits rose 25%. An 8.5% fall in cash costs per ounce, to $648/oz, more than offset a slight fall in the average gold price to $1,187 (Q115: $1,215).

Guidance for the full year remains unchanged with production expected to be weighted towards the second half.

Operational Highlights:

Loulo-Gounkoto Complex - Production of 172,554oz was down 6% on the quarter but up 34% on the year. Total cash costs reduced by 6% to $551/oz versus Q1 2015

Morila - Production fell 7% on the quarter to 16,191oz, following repairs to the mine's milling facilities. Total cash cost improved to $915/oz versus $1,060/oz in Q4

Tongon - Quarterly production was 54,122oz, 20% below the previous quarter. Output was impacted by an extended commissioning period and intermittent grid power interruptions, including a week-long power cut in March. Following the fall in production total cash costs rose 17% to $900/oz (Q415: $$771/oz)

Kibali - Planned changes to operating methods and a failure at the one of the mines two mill's meant that production dropped to 130,577oz in Q1, 15% below the previous quarter. This in turn led total cash costs to rise to $740/oz (Q415: $621/oz)

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.