Randgold Resources Cutting Costs, Scaling Back Production at Loulo-Gounkoto

Randgold Resources (NASDAQ:GOLD) announced that they intend to cut spending and are changing the mining plan at their Loulo-Gounkoto project in the wake of weak Q1 performance and falling gold prices.

As quoted in the press release:

The company says it reacted promptly to the recent drop in the gold price, and has reviewed all its operations and projects, with a focus on managing cash flows. At Loulo-Gounkoto, the review has resulted in a change in the mining plan, which reduces the expenditure on capital and operational development of the underground mines, as well as the build-up of lower grade stockpiles, while efficiently feeding the ore mined to the plant. The net effect is a small reduction in grade, and consequently the complex has reduced its anticipated production for the year from 590 000 to 560 000 ounces. Capital expenditure and working capital tied up in stockpiles have each been reduced by about US$20 million.

Randgold’s CEO, Mark Bristow, said:

While Randgold remains strongly placed to sustain its profitability under any realistically conceivable gold price scenario, we have nevertheless reviewed each operation’s plans in the light of the recent drop in the price, making adjustments where necessary to ensure we manage our cash flow given this year’s large capital spend. At Kibali, the rescheduled capital expenditure will reduce the peak funding requirement without materially affecting the production profile or putting cash flow generation at risk.

To view the whole press release, click here.