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Randgold Resources tumbles on profits dip

Reported profits were 8% lower over the June quarter to US$58.7mln as production dropped 4% to 281,500oz.

picture of gold nuggets
Less gold, less profits at Randgold

Production problems at the Tongon and Kibali mines meant ‘one of the toughest quarters in years’ for Randgold Resources (LON:RSS).

Mark Bristow, chief executive of the Africa-based gold miner, reported profits were 8% lower over the June quarter to US$58.7mln as production dropped 4% to 281,500oz.

Costs rose 12% to $727/oz because of grade and ore feed issues at Kibali and a mill failure at Tongon, events that were only partly offset by the gold price rising to three year highs.

Bristow said the mill problem at Tongon was now fixed while a new satellite pit at Kibali should improve its feed flexibility and grades. 

He added that the development of DRC-based Kibali remained ahead of schedule, but added the company was ‘intensifying its focus on critical operational issues’ to ensure there is a substantial second-half improvement.

Profits for the half year to June rose to US$122.6mln (US$110.5mln) on revenues of US$700mln (US$699.4mln).

Shares that have soared this year on the back of the rising gold price tumbled 11% to 7,950p.

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