London, 10 May 2018 – Randgold Resources said today its 2018 production guidance remained intact despite a softer first quarter in which it contended with multiple challenges.
Following the full commissioning of its underground mine, Kibali in the Democratic Republic of Congoincreased quarterly production by 22% compared to the corresponding quarter of the prior year and is on track to achieve its 2018 target of 730 000 ounces.
In Côte d’Ivoire, Tongon’s production was impacted by a series of work stoppages. With operations now back at full capacity, the mine is committed to clawing back most of the lost production. Randgold’s flagship operation, the Loulo-Gounkoto complex, made a strong start to the year although changes in the mining schedule affected the underground grade, impacting on production.
Results for the quarter, published today, show group production lower at 286 890 ounces (Q4 2017: 340 958 ounces) and total cash cost per ounce higher at $720/oz (Q4 2017: $627/oz). Profit was down at $66.5 million (Q4 2017: $87.1 million). Cash and cash equivalents grew by 3% to $739.5 million while the company remains debt-free. At the recently held AGM, shareholders approved the 2017 dividend of $2 per share, a 100% increase on the previous year.
Chief executive Mark Bristow said coming off a strong prior quarter and record performance in 2017 the company had anticipated a slower start to this year with a gradual build-up throughout the year. Despite the issues that arose, it was still confident of meeting its annual production guidance of 1.30 to 1.35 million ounces.
“It was a very active quarter, in which we ramped up the underground production at Kibali, advanced the Gounkoto super pit project and the development of the Baboto satellite pit at Loulo, and prepared the Ntiola satellite deposit at Morila for mining,” Bristow said.
“At the same time we also successfully handled the difficult labour situation at Tongon, sorted out the sequencing at Loulo and continued negotiations relating to the new mining code with the DRC government. This demonstrates the depth and competence of our management team, and its ability to deal with complex operational and socio-political issues on multiple fronts.”
During the quarter, exploration highlighted the potential to add ounces at Kibali, Loulo and Tongon as well as new reserve opportunities at the Massawa project in Senegal. Bristow said Randgold was also aggressively hunting for its next big project in the African gold belts as well as further afield.
Shareholders approve 100% hike in dividend
At the company’s annual general meeting held in Jersey on 8 May 2018, shareholders approved a final dividend for the year ended 31 December 2017 of $2.00 per share, a 100% increase on the prior year. Since its first dividend in respect of the 2006 financial year, the annual dividends have increased by 1 900% over that 11 year period.
The cash payment will be made on 18 May 2018 to shareholders who were on the register as at 23 March 2017. The ex-dividend date was 22 March 2017. The exchange rate for payment to those shareholders who have elected to receive the final dividend for the year ended 31 December 2017 in Pounds Sterling is: $1 = £0.7395.
Chief financial officer Graham Shuttleworth says the sustained dividend growth validates the group’s business model and reflects the profitability and financial strength of the company, which at year end had net cash of more than $700 million and no debt. The company intends to maintain a net cash position of around $500 million to fund new growth opportunities and any surplus capital will be returned to shareholders.
Africa needs fiscal stability to develop resources optimally
The history of economic development in Africa has been one of largely unplanned changes primarily driven by external forces. The decolonisation process which started in the 1960s ended exploitation by the European powers, but also ushered in a long and destructive flirtation with Marxism and dictatorial rule in the newly independent countries. The end of the Cold War and Soviet sponsorship led to a degree of democratisation, opening the door to foreign investment and a period of growth supported by global institutions such as the World Bank, UNDP and IMF. The supercycle in commodity prices starting at the turn of the century sharpened investment for Africa’s mineral resources resulting in an acceleration of funds flowing into new projects and an associated increase in revenue flow to the governments of mineral rich countries.
Randgold GM operations for Central and East Africa Willem Jacobs says that by 2015, however, the tide turned. The commodities boom had ended, developed countries had to deal with their own economic problems and the World Bank and IMF indicated that they were looking to reduce their commitment to deficit funding of African countries, who they encouraged to find ways to balance their own books.
“The need to support growing populations against a background of fledgling economies and the absence of external funding prompted a resurgence of resource nationalism across the continent, with many governments seeking increased revenues, disregarding the long term negative consequences of their actions. This trend has been particularly evident in the recent run of mining code revisions and the introduction of more aggressive tax regimes. In extreme instances, there have even been attempts to change existing fiscal and legal stability provisions,” says Jacobs.
“These actions by governments are having a substantial negative impact on the extractive industries (minerals, oil and gas) which are one of the main drivers of economic growth in these countries. The extractive industries not only generate tax revenue and employment, but also provide fixed investment in mining ventures, support infrastructural development, facilitate the transfer of much needed technical skills, promote the establishment and growth of local suppliers and secondary industries, and are in general valuable corporate citizens. It is not just the direct and indirect taxes that the industry contributes – the economic multiplier effect associated with mining ventures has a material positive impact on economic …read more
From:: Mining.com