[miningmx.com] — RANDGOLD Resources CEO Mark Bristow has put the boot into the group’s “naysayers’ with a good set of March quarter results showing continued production growth from the Tongon mine in Cote d’Ivoire.
Tongon nearly doubled its gold production in the March quarter to 54,968 oz (December quarter – 28,126 oz) and reduced total cash costs to $411/oz ($459/oz) despite near civil war conditions in the country following last year’s disputed presidential elections.
Worried investors knocked the Randgold share price down from around ₤65 in October to ₤45 in April because of their concerns over how Tongon might be affected by the strife in Cote d’Ivoire.
Despite these latest results the Randgold share price remained depressed rising 2% to around ₤51 in trading on the London Stock Exchange on Thursday morning.
Bristow confirmed to Miningmx on March 31 that the situation in Cote d’Ivoire was the reason for the plunge in the company’s share price despite his repeated assurances that operations at Tongon continued to go well.
He added, ” but I don’t think the market is going to accept this until we publish our next quarterly results which are due out in the first week in May. Then the numbers will speak for themselves.’
Bristow commented in the review of the March quarter results published today that, “the (Tongon) team did a great job, continuing to operate the mine to plan during this very challenging period, when the political situation impacted severely on essential functions such as the logistic supply chain and the movement of key operational, construction and contractor personnel.
“Their success was also a tribute to the effectiveness of Randgold’s partnership strategy.
“The relationships we carefully cultivated over many years, not just in Cote d’ivoire but in its neighbouring countries, stood us in good stead during this trying time.
“In addition, the fact that we had convincingly demonstrated that Tongon was a major national asset, in which the country was a significant stakeholder, meant that both sides to the conflict appreciated its value and accepted our bona fides.’
Main impact of the conflict – which has since been resolved – was on the movement of gold from Tongon which hit sales by the mine.
Tongon had 31,646oz of unsold gold on hand at the end of the March quarter. Bristow said that gold shipments had resumed since the end of the quarter as the administration of Cote d’Ivoire has returned to normal.
In total, Randgold sold 136,267oz (108,856oz) in the March quarter for revenues of $186.5m ($144.9m) which generated attributable profits of $45.9m ($32.3m).
Bristow said Randgold remained committed to its production forecast for 2011 made in March which was that group gold production would increase by more than 70% to between 750,000oz and 790,000oz.
Tongon was scheduled to produce 260,000oz to 270,000oz while another 420,000oz to 440,000oz was planned to come from the Loulo mining complex and the Morila JV would kick in 200,000oz to 210,000oz.
Bristow said today, “the continued improvement in the stability of Cote d’Ivoire should ensure that the operation can ramp up to full production by mid-year as scheduled.
“Similarly, the average ore grades processed at the Loulo complex are anticipated to rise over the year underpinned by the start-up of Gounkoto which remains on schedule for first ore-processing by mid-year.’
