Randgold profit tumbles despite record gold production

Randgold profit tumbles despite record gold production

Randgold reaffirmed that Kibali remains on track to exceed its full-year production guidance of 600,000 ounces. (Image courtesy of Randgold Resources)

Africa-focused gold miner Randgold Resources (LON:RRS) (NASDAQ:GOLD) posted Thursday a 26% drop in profit to $48.8 million in the third quarter from $66m a year ago, as gold prices continue to sag while costs increase.

The miner, which is debt-free despite current market conditions, produced a record 305,288 ounces in the quarter, up from 299,320 a year earlier, thanks mainly to its Kibali (DRC) and Morila (Mali) mines.

Gold prices are down 6% so far this year, after having hit a five-year low in July. By contrast, Randgold's shares have fallen less than 1% in 2015.

“The gold mining industry is severely stressed and Randgold is certainly not immune to the pressure. Relative to our peers, however, we are still doing well,” chief executive Mark Bristow said in a statement.

Bristow is also anticipating more mergers in the industry, adding that the sector won’t be able to survive at the current spot.

“The big producers have the biggest challenges of all,” Randgold’s he said in a Bloomberg Television interview in London. “Eventually, you’re going to see survival mergers.”

The company, whose production is largely in Mali, the Ivory Coast and Senegal, reaffirmed that Kibali remains on track to exceed its full-year production guidance of 600,000 ounces and the company as a whole is expected to produce gold within its guidance range of around 1.2 million ounces this year.