Randgold output up 28%, hunts for new mines
Africa-focused Randgold Resources (LON:RRS) said Thursday its quarterly production rose to 299,320 ounces, 28% more than in the same year-earlier period, despite challenging precious metal prices and the ongoing Ebola threat.
Even with a drop in profit of 1% to $172.7 million the company is confident in the precious metal it mines. In fact it is looking for new assets to ad to its portfolio, as a severe slump in the bullion price forces rivals to consider selling mines.
“Everyone would like to sell assets that they don’t want,” chief executive officer Mark Bristow told Bloomberg. “We want assets they don’t want to sell. It’s going to come as a surprise to the market as people realize they have to do it. There’s going to be a tipping point.”
Bristow added that buying a mine, rather than a company, is Randgold’s preferred option.
Bristow (55) founded Randgold in the 1990s. Under his management, the company has grown to have a market value of $7 billion (4.2 billion pounds) and be the U.K.’s biggest gold producer.
A geologist by training, Bristow led the discoveries of three gold mines in Mali holding 20 million ounces in deposits. The company has also built the Kibali mine in the DRC and Tongon in Ivory Coast.
Thanks to the executive’s conservative policies, Randgold has not needed to write down its reserves and resources as the gold price dropped, unlike most of its gold peers. This is because the firm has calculated its reserves at $1,000 per ounce and its resources at $1,500 per once for the past three years.
The precious metal fell to a four-year low of $1,137.94 an ounce yesterday, below the production costs of seven out of 19 companies tracked by Bloomberg Intelligence, including Harmony Gold (NYSE:HMY) (JSE:HAR), South Africa’s third-largest producer, and Primero Mining (NYSE:PPP), (TSE:P).