Africa-focused gold producer Randgold Resources (LON:RRS) said Thursday first-quarter profit from mining fell 16% due mainly to lower gold prices and reduced production.
Chief executive Mark Bristow said the quarter had been a very active one, with the underground mine development at Kibali, in the Democratic Republic of Congo, advancing ahead of schedule, the continuing expansion and upgrade programme at Tongon (Ivory Coast) delivering an improving performance, and Loulo (Mali) moving towards full owner-operator status at its underground mines.
“Our exploration strategy has two pillars: a brownfields programme focused on the areas around our existing ore bodies which is designed to replace the reserves depleted by mining; and a greenfields programme tasked with expanding our footprint and finding new targets,” he said.
The company, which mines gold in Mali, Cote d’Ivoire and the Democratic Republic of Congo, said that profit fell to $143.9 million for the quarter ended March 31 from $171 million a year earlier.
Sales jump, gold prices to stay low
While sales jumped up by 1% to $344.6 million, the company believes gold prices will remain in the $1,000 to $1,400 per ounce range for as long as the market remains oversupplied.
“With the gold mining industry in a highly stressed state, and many companies heavily burdened by debt, the status quo looked unsustainable and currently unprofitable production would eventually have to be eliminated,” the company said.
Bristow also said that, by the end of the current quarter, his company will know whether it has a major find at the Fonondara project in Ivory Coast. According to Bloomberg, Randgold is soon starting up the project drill rigs, which — in Bristow’s words — “is the first real exploration target [Randgold] has talked about for five years.”
Full results can be seen here.