Randgold FY pretax and gold sales rise

West Africa-focused gold miner Randgold Resources Ltd reported a rise in pretax profit to US$75.9 million from US$63 million a year earlier, while gold sales rose to US$338.5 million from US$289.8 million.

Attributable gold production for the fourth quarter to end-December 2008 was up 6 percent on the previous quarter at 107 321 ounces, bringing the total for the year to 428 426 oz, dow from the 444 573 oz produced in 2007).

Group total cash costs for the quarter were US$459 per oz, down 11 percent on the previous quarter, partly as a result of a drop in the price of diesel which is a major component of the company's cost structure. Total cash costs for the year were in line with revised guidance at US$467/oz against 2007's US$356/oz, reflecting the pressure of consumable and other price increases during the year.

At Loulo, increased throughput partially offset the impact of lower head grades caused by a slower than planned ramp up in the Yalea underground development.  Although the underground project experienced a number of challenges through 2008, with the support of the equipment suppliers and service providers they have been addressed and it is expected to reach the planned 120 000 tonnes per month by year end.

At Tongon in the Côte d'Ivoire, work has started on the third new mine to be developed by the company. The government has issued an environmental permit, clearing the way for the mining licence to be granted. The mine remains on track for commissioning in the last quarter of 2010

Further diamond drilling at Massawa in Senegal has confirmed that it is a significant discovery. The mineralised system has been drill proved over 7 kilometres and the mineralisation is open in all directions. Recent drilling results have delineated an 850 metre high grade northern zone and this along with encouraging metallurgical results gives Massawa the potential to be one of the better new gold projects around, the company said.

Massawa is now the subject of a scoping study on which a decision to proceed to the feasibility stage will be based. Exploration also continues around Loulo and Tongon.

Chief executive Mark Bristow commented: “We're on track to ramp up production at Loulo to the planned levels. While Morila needs a lot of management at this stage of its life, it's set to remain a good cash generator for several more years. Tongon is beginning to take shape as our next mine and Massawa leads a portfolio of attractive prospects.

“The reduction in the oil price and other consumables, if sustained, should have a positive effect on our cost profile. And the fact that we have a strong balance sheet with more than US$250 million cash in hand means that even in these troubled times we are capable of funding our current growth plans,” he said.