Randgold (GOLD) rebounds in final quarter
February 8, 2005
By Laura Humble
London - Profit at Randgold Resources surged in the fourth quarter after it mined more gold and sold it for higher prices, the Jersey-based company said yesterday. Net income for the three months to December rose to $15.7 million (R96.6 million) from $219 000 a year earlier. Revenue from gold sales almost doubled to $33.7 million from $18.1 million.
Randgold is developing the Loulo mine in Mali to make up for declining output from Morila, the nation's biggest gold mine and the company's only operating asset.
Although fourth-quarter output at Morila beat expectations, production for the full year was 5 percent below the forecast amount after technical problems expanding the mine.
"We always said the last quarter was going to be better, once we had sorted out the technical problems," said chief executive Mark Bristow.
"We also benefited from better grades than expected and higher gold prices."
The company's full-year net income fell 58 percent to $20.1 million as revenue from gold sales declined 33 percent to $73.3 million. Morila's full-year gold output was 510 485 ounces, with 226 679 ounces of this produced in the fourth quarter.
Bristow said Loulo would start gold output in July and should produce 100 000 ounces by year-end.
Randgold owns 40 percent of Morila with AngloGold Ashanti holding an equal stake.
The company owns 80 percent of Loulo. Production attributable to Randgold from both mines should be 320 000 ounces this year, compared with 205 000 ounces last year.
Morila produced gold for an average cash cost of $136 an ounce in the fourth quarter. Cash costs this year were expected to average $200 an ounce, Bristow said. A weakening dollar would continue to boost gold prices, he said.
Randgold is also exploring for gold in Senegal, Burkina Faso, Ghana and Tanzania.
It had 365 000 ounces of future output from Loulo sold forward at a price of $435 an ounce, Bristow said. Hedges at Morila had all been delivered into.
