Randgold reported its 4Q production figures at Indaba on the 7th of February. During the quarter 132,199 attributable ounces of gold were produced and 108,856 ounces of gold sold. Group total cash costs for the quarter were $766/oz. The unaudited profit for the year was $45.6M before tax and $26.8M after tax and minorities. After adjusting the model for the Tongon sales, we had assumed no sales; the Fox-Davies forecast was for a pre-tax profit of $45.1M.
Comment
Overall it has been a disappointing year for Randgold. The problems in the Ivory Coast and the slower than expected rate of development at the Loulo mine have resulted in significantly lower earnings than we were anticipating in early 2010. It has been a disappointing year for the Loulo mine, with two downgrades to the production forecast, and the high grade ore was not intersected until November, a month late. Additionally, the mill was subjected to an overrun on the mill relining and extended downtime for the upgrade to the switch gear following power interruptions earlier in the year. Whilst frustrating, this is nothing serious. The fact that the process plant is being expanded and will treat open pit ore from Gounkoto should mean that despite any underground mining problems at Loulo, the mill will remain full. Further, although the expanded processing plant at Loulo is designed for 3Mt pa, we would be surprised if it did not do at least 10% more than this, although we have modeled 3Mt pa. Exploration continues to give good results at Gounkoto, and we anticipate that the open pit will eventually be much bigger than the current 13.79Mt.
The operations
Loulo Loulo treated 829kt of ore grading 3.3g/t and produced 80.33k oz for the quarter taking production for the year to 316.5k oz. Cash operating costs were $725/oz and total cash costs $799/oz. This compares to the Fox-Davies production forecast of 81k oz at a cash operating cost of $700/oz. The Yalea underground had its best quarter ever, breaking 207.8kt of ore including development. The new crusher installation was completed and the ventilation model for Yalea was reviewed with a new model implemented successfully. Targeted production for 2011 for the combined Loulo/Gounkoto complex is between 420 and 440k oz in 2011. However, around 120k oz of this will come from the Gounkoto operation, with the ore being toll milled through the Loulo plant. Actual production…
