Releasing its results for the quarter and year to December today, the company reported production of 910 373 ounces for 2013, up 15% on the previous year, and forecast a continued rise in output over the next five years, with production in 2014 expected to increase by between 25% and 30% on the back of increasing grades at the Loulo-Gounkoto complex, improving recoveries and throughput at Tongon and the recently commissioned Kibali's first full-year contribution.
Total cash cost per ounce for the quarter was US$628, down 5% on the previous quarter, and US$715 for the year, down 3% on 2012. On the back of the higher production, gold sales of US$1.27 billion for the year were almost in line with the previous year, but a drop of 17% in the average gold price received reduced profit from 2012's US$510.8 million to US$325.7 million. The board nevertheless recommended an unchanged dividend of 50 US cents for shareholders' approval. Randgold's cash balance improved quarter on quarter and it ended the year with no net debt.
Chief executive Mark Bristow said 2013 was one of Randgold's best years, as it made substantial advances on all fronts in the face of multiple challenges.
"The highlight of the year was the early start-up of Kibali which, like all our mines, has posted a profit in its first quarter of operation, but we also delivered at our other operations, as well as on our safety and sustainability programmes, our host country development initiatives, and the integration of our logistics, accounting and reporting functions on a SAP platform," he said.
"Perhaps most significantly, we anticipated the shift in the gold market and were able to align our operations to the changing environment in good time, securing our sustained profitability at the lower gold price."
Reviewing Randgold's operations, Bristow said the Loulo-Gounkoto complex in Mali - now one of the largest of its kind in Africa - had delivered another stellar performance, beating its production guidance by 20 000 ounces to 580 000 ounces and achieving a very creditable US$34/oz improvement in total cash costs to US$704/oz.
In Côte d'Ivoire, Tongon completed almost all its efficiency enhancement projects, and while throughput has increased, and is now close to budget, recoveries are still below the targeted rate. A further investigation has shown that the existing circuit is not recovering enough of the gold associated with arsenopyrite, so the flotation circuit will be expanded to capture most of the sulphide in the ore.
Kibali started production on 24 September and sold its first gold in October, ending the quarter well ahead of all its forecasts. Gold production of 88 200 ounces was 46% more than scheduled while total cash costs of US$464/oz were in line with expectations, given the slightly higher grade milled. Profit from mining prior to depreciation, interest and tax charges in Kibali's first quarter was US68.3 million and it ended the year with increased reserves and resources. Kibali is a work in progress, with the development of its second recovery circuit, three of the four hydropower stations and the underground mine still underway.
The Morila retreatment operation exceeded its budgeted production at a lower total cash cost but at current gold prices it is becoming marginal and its closure has therefore been brought forward to 2016/2017.
"The year ahead is going to be a tough one, but I am confident that we're in good shape to deliver on our objectives again. We'll be investing capital of some US$330 million in our growth projects and a further US$60 million in exploration. Exploration success, more than any other factor, has differentiated Randgold from the rest of the gold mining industry, and we are sustaining our strong focus on the hunt for new discoveries as well as additional ounces for our existing orebodies. In addition, we'll be looking for profitable acquisition or joint venture opportunities generated by the current stress in the industry," Bristow said.
