Johannesburg - London and New York-listed Randgold has set its sights on improving its dividend payout and three new mining projects in five years as the higher gold price contributed to a rise of 32 percent quarter on quarter in the third quarter.
The gold producer said forecast cash flows generated from operations were expected to support funding for the three new projects over the next five years, either from its exploration portfolio or new business initiatives.
“Our target is to have three projects defined in the next five years,” Randgold chief executive Mark Bristow said yesterday. “We’ve got some very exciting new projects. That gives us a new base on which to continue to grow the company.”
Projects in Senegal, Ivory Coast and the Democratic Republic of Congo (DRC) could eventually become mines, Bristow said. He said if the gold price stayed above $1 250 (R16 900) an ounce, the company should get close to a $500 million net cash position at the year end.
Discovery
Randgold’s priorities were to fast-track the development of the Boundiali structures in Ivory Coast with the aim of making a world-class discovery.
It also aimed to establish whether the Massawa project in Senegal or Gbongogo in the Ivory Coast, could replace Tongon in Ivory Coast; and to define potential satellites around Tongon while replacing depletion at other mines.
In the quarter, net income rose to $65.6m from $42.3m a year earlier, Jersey, Channel Islands-based Randgold said yesterday.
Gold output slipped 1.4 percent to 301 163 ounces, while its costs per ounce dropped 5.2 percent to $663.
Full-year output will be in the lower half of a 1.25 million to 1.3 million ounce target range. That’s after the company suffered production setbacks at mines in the DRC and Ivory Coast in the second quarter.
Production was “slightly behind” expectations, Kieron Hodgson, an analyst at Panmure Gordon in London, said.
BMO Capital Markets said the results missed its estimates.
Gold producers have been buoyed by a 22 percent jump in gold prices this year to about $1 300 an ounce.
The Bloomberg Intelligence global senior gold index of major miners has almost doubled this year, the best performance in data going back to 2006.
Randgold, which also mines in Mali, is up 73 percent. Mali’s government ordered Randgold last month to pay half the 46.89 billion CFA francs (R1.04bn) it says the London-listed miner owed it before opening talks about the remaining sum.
BUSINESS REPORT