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Annual Results

Randgold hikes FY profit by 38%, dividend by 52%

06 February 2017 07:22

Randgold Resources has hiked its FY profit to $294.2m, up 38% on the year, and proposed lifting its FY dividend by 52% to $1 a share after improving production for a sixth consecutive year.

It said flagship Loulo-Gounkoto in Mali set a blistering pace to exceed its annual guidance by 37 000 ounces at its lowest ever total cash cost per ounce, and solid performances from the other mines contributed to the record group production of 1.25m ounces (2015: 1.21m ounces).

The group's total cash cost per ounce of $639 was down 6% on the previous year.

Randgold added that, in spite of the high level of activity at its operations, it broke another record by reducing its lost time injury frequency rate by 22% to a lowest ever 0.46.

CEO Mark Bristow confirmed Randgold had passed its net cash target of $500m, with $516.3m in the bank at the end of 2016, and no debt.

He said Tongon in Cote d'Ivoire had achieved its revised production guidance and reduced its total cash cost per ounce while Kibali in the Democratic Republic of Congo came back strongly after a slow first half and upped quarter-on-quarter production by 21% in Q4.

"The shaft development of Kibali is scheduled for completion by the end of this year with the integration of its underground mine's decline and vertical shaft systems," Bristow said.

"Kibali's second hydropower station has just started commissioning while the third station is currently being built by an all-Congolese contracting team."

Randgold's first mine, Morila in Mali, was now a tailings retreatment operation but continued to make a contribution towards its rehabilitation costs.

"As it heads for closure in 2019, Morila has advanced its plans for an agribusiness centre -- which will encompass the wide range of agribusiness projects it initiated over the years -- to the point where this qualifies for government support as an agripole.

"The development of this project is in line with Randgold's policy that its host communities should benefit from its activities, even after mine closures," Bristow added.

"We have shared with the market our 10-year plan, which shows how we plan to sustain our profitability over the next decade at a gold price of $1 000 per ounce. It also envisages -- but does not depend on -- the development of three new mines over the next five years," Bristow said.

He added that directors had now given the go-ahead for the Gounkoto super pit and the technical and financial study on the Massawa-Sofia project in Senegal had demonstrated that this has the potential to meet the company's investment criteria.

"In the meantime, our exploration programmes have continued to add reserves at Loulo-Gounkoto and Sofia and to expand our portfolio in Cote d'Ivoire. As reported earlier, we have also increased our presence in our target areas through a number of early-stage joint ventures."

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