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Despite an output-crippling strike at its Tongon mine in July, the company saw quarter-on-quarter profit and production increases in Q2.
Randgold Resources (LSE:RRS) has published its second-quarter results, showing a 6-percent increase in profit and a 9-percent increase in production compared to Q1.
The London miner said Thursday (August 9) that it was able to produce 313,302 ounces of gold in Q2, up from the 286,890 ounces achieved in the previous quarter. Meanwhile, profit from mining rose to US$190.6 million, allowing the company to maintain its 2018 targets.
“[G]iven Kibali’s strong performance, we are on track to be within the group production and cost guidance for 2018,” said Mark Bristow, chief executive of Randgold.
Randgold is maintaining its annual gold production target of between 1.3 and 1.35 million ounces at a cost of between US$590 and US$640 per ounce, largely due to success at its Kibali mine.
At the end of Q2, underground operations at Kibali were successfully transitioned from contractor mining to owner mining, following the example set at the company’s Loulo mine. At Loulo, the move should deliver cost reductions and efficiency improvements, while Kibali remains on track to beat its 2018 production forecast.
Meanwhile, Randgold’s Tongon mine only accounted for 22 percent of its total production in 2017, but was able to record a 12-percent increase in output during the second quarter. Even so, its 2018 target has been lowered to 250,000 ounces from the 290,000 ounces previously expected.
A strike at Ivory Coast-based Tongon, which started on July 13, has crushed production and followed similar stoppages at the operation earlier this year.
“The Tongon work stoppage is obviously a challenge, but we take comfort from the government’s leadership in ensuring measures are taken to protect the assets and that they are dealing with the situation,” stated Bristow. “We are still assessing its impact,” he added.
As of 12:45 p.m. EST on Thursday, Randgold was up 1.28 percent, trading at GBX 5,598.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
