- Gold producer hit by operational issues at African mines
- Keeps full-year output forecast at 1.25-1.3 million ounces
Randgold Resources Ltd. slid the most in four years after reporting first-quarter production of the metal fell 11 percent after operational problems at two of its African mines.
The Jersey, Channel Islands-based company mined 291,912 ounces in the first three months of the year, down from 326,430 ounces in the last quarter of 2015, it said in a statement Wednesday. Randgold maintained a full-year target of 1.25 million ounces to 1.3 million ounces, Chief Executive Officer Mark Bristow said. The shares dropped as much as 12 percent.
Production slipped after a mill outage at its Kibali mine in the Democratic Republic of Congo and power-supply issues at its Tongon mine in Ivory Coast. The company also operates the Loulo mine in Mali.
“Both the issues at Kibali and at Tongon are not one-offs in our view,” said Tyler Broda, an analyst at RBC Capital Markets, in London. “Had Loulo not had another strong quarter, it would be difficult for Randgold to meet its full year guidance.”
Randgold dropped the most since March 2012, reaching the lowest since Feb. 16 in London. It was down 11 percent at 5,885 pence by 4:03 p.m. local time.
“We’ve had a few operational challenges,” Bristow said. “It’s a little bit lower than we planned, but not materially. We haven’t changed our full-year guidance.”
Randgold reported first-quarter profit of $54.4 million, 13 percent higher than a year earlier. Sales rose 0.3 percent to $345.8 million.
Producers have been buoyed by a recovery in the gold price, with the metal climbing to $1,300 an ounce this week for the first time since January 2015 on speculation central banks from the U.S. to Europe will maintain low interest rates. Randgold has surged 43 percent this year, while Barrick Gold Corp. and AngloGold Ashanti Ltd. have more than doubled this year.