Randgold Resources shares (LON:RSS,NASDAQ:GOLD) were marked down on Thursday after the miner announced output at its Kibali project in the Democratic Republic of Congo (DRC) dropped sharply during the second quarter.
Randgold, worth nearly $8 billion in London after a 33% rise in value this year, reported a 19% decline in output compared with the first quarter at the $1.7 billion mine which began production in December a year ahead of schedule.
The Jersey-based company produced 91,137 ounces of gold at the mine in the quarter ended June 30, down from 112,549 ounces in the first quarter.
Kibali, owned by Randgold and AngloGold, each with a 45% stake, and the DRC state gold mining company Société Miniere de Kilo-Moto, is expected to meet its forecast of 550,000 ounces for the current year.
The project, initially scheduled for commercial production only in 2015 required the resettlement of more than 4,000 families from 14 villages in a new town.
Randgold pegs mineral reserves at Kibali at 11 million ounces of gold.
Overall production at Randgold dipped quarter on quarter but surged 41% compared to last year to 277,283 ounces thanks to its flagship Loulo-Gounkoto complex in Mali which produced 174 052 ounces, up 3% on the first quarter. Operations at Tongon in Côte d’Ivoire is also predicted to slow as equipment is upgraded.
Randgold has an annual production target of 1.2 million ounces by 2015 and is targeting production of 900,000 – 950,000 oz of gold this year at a cost of $700/oz to $750/oz.
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