Gold prices boost profit at Randgold

 
Marion Dakers
RANDGOLD Resources was one of the biggest risers in the FTSE 100 yesterday after soaring gold prices gave its fourth-quarter results a boost.

Gold sales for the quarter rose 25 per cent on last year to $145m (£90m), despite turbulent elections in the Ivory Coast hitting production at Randgold’s Tongon mine.

The firm said the 23,400 ounces of gold produced at Tongon would have added $21.7m to annual profits.

During 2010, Randgold produced 316,539 ounces of gold, or 35 per cent less than 2009.
But Randgold’s pre-tax profit for the last three months of 2010 was $50m, up 43 per cent compared to last year, on revenues of $144.8m.

The price of gold rocketed from less than $1,100 per ounce to more than $1,400 in 2010, as investors piled into what is seen as a safe asset.

Randgold expects to produce up to 790,000 ounces in 2011, representing a 70 per cent increase on last year.

The firm also hopes to press ahead with expanding its Loulo mine this year, having brought in experienced engineer Ted de Villiers to oversee new underground exploration at the site in Mali.

Overall, costs during the quarter rose 13 per cent over the year due to difficulties at the flagship Loulo mine, including power cuts and higher transportation costs.

“Loulo had its share of problems in 2010 but its total production of 316,539 ounces for the year was in line with management’s updated forecast,” said chief executive Mark Bristow.

Randgold shares closed up 2.6 per cent at £51.10 yesterday.