Randgold Resources chief executive Mark Bristow today described 2015 as one of the best years in the company's history as it faced down the challenges surrounding the embattled gold mining industry to post performance improvements and advances on every front
Production and costs were in line with the company's annual guidance, with production setting a new record of more than 1.2 million ounces, up 6% on the previous year, and group total cash cost per ounce down by 3% at $679/oz. Strong cash flows from the operations boosted cash on hand by 158% to $213.4 million but profit for the year was $212.8 million against the previous year's $271.2 million, reflecting the decline in the gold price. The board has proposed a 10% increase in the annual dividend, reflecting the strong cash flows generated by the business.
"It's easy to achieve when the stars are all aligned but it's a lot more difficult in a market as challenged as this one, which makes these results even more pleasing," Bristow said. He attributed the company's robust showing to improved plant throughput, ore feed and grade management; reduced underground mining costs at Loulo following its transition from contract mining to owner mining; lower input costs; and improved efficiencies across all operations.
Bristow said Randgold had reviewed all its mine plans in the light of current conditions and with a focus on true returns and break-even cash flows. As a result of this, Loulo-Gounkoto and Kibali now both forecast annual production of +600 000 ounces at a total cash cost of around $600 per ounce or below, Loulo-Gounkoto for 10 years and Kibali for 12, while Tongon was forecasting to produce an average of more than 300 000 ounces for five years.
Operationally, Loulo-Gounkoto came back strongly in 2015 after a shaky start to the year while Kibali again beat its forecast. Tongon continues to improve its performance on the back of its plant upgrade and expansion programme and the retreatment operation at Morila, now scheduled for closure in 2019, remains profitable.
Bristow said Randgold continued to invest substantially in exploration, which remains the engine that drives its business and is expanding its footprint in its target areas, as well as in its sustainability programmes, which it regards as essential to retaining its social licence without which no mining company can operate successfully in Africa.
"Randgold is now in a unique position to continue delivering value to all its stakeholders. Our mines can continue to generate cash flows at gold prices well below the $1 000/oz level. Our positive production and cost profile extends beyond 10 years. Our exploration teams are not only replenishing the ounces we mine but are making significant progress in the hunt for our next big discovery. And when they find it, we can afford to build our next new mine without recourse to the market, thanks to our robust balance sheet," he said.
