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04 Feb 2008 09:53
Randgold Resources said 2007 net profit fell 10% as costs rose, but the African gold producer said on Monday that a buoyant gold price should boost this year’s earnings.
“On a before-tax basis at $900 gold, we’ll get up to an 80% odd increase in our profits for the full year,” said chief executive Mark Bristow.
Gold traded around $910 per ounce on Monday after hitting a record high of $936,50 on Friday.
Randgold, which runs mines in West Africa and has a main listing in London, said 2007 net profit slipped to $45,6-million from $50,9-million the previous year, due to higher mining—or cash—costs, a tax adjustment and higher exploration and corporate expenses.
Randgold shares fell 3,5% to £23,84 by 8.26am GMT, underperforming a 0,6% rise in the United Kingdom mining index but tracking other gold shares which sank along with the gold price.
Attributable production for the year to end December surged by 84% to 444 573 ounces due to the ramping up of its new Loulo mine and 2008 output was expected to at a similar level, Bristow added.
Randgold, which declared a final dividend of 12 cents, up 20%, said total cash costs for the year increased by 13% to an average of $372 per ounce.
Bristow said the company said would hold talks with AngloGold Ashanti about possibily buying its 40% stake in their jointly owned Morila mine in Mali.
Randgold has also agreed to take over responsibility for operating the mine from AngloGold, which is undergoing a strategic review of its assets under new CEO Mark Cutifani.
The purchase of AngloGold’s stake would depend on the price, but Morila was a mature mine and not as important to Randgold as its new growth projects such as Tongon in Côte d’Ivoire.
Randgold said its board has given formal approval for developing Tongon, which is due to go into production in 2010. - Reuters
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