Randgold profit and sales fall on weak gold price

 
Suzie Neuwirth

FTSE 100-listed Randgold Resources’ share price fell over four per cent in early trading, after plunging gold prices caused the miner’s second quarter profits to fall by almost two thirds.

Profit fell to $54.1m (£35m), down from $141m year-on-year and $81.6m quarter-on-quarter. Gold sales fell by 18 per cent from the previous quarter, due to a 17 per cent drop in the average gold price to $1,363 per ounce.

Total profit from mining decreased by 47 per cent to $197.7m year-on-year.

“The depressed gold price has not come at a good time for [the firm] given the high capex requirements as it develops [the] Kibali [mine],” said Investec. “We note, however, that the company’s operations are still cash generative, as opposed to many of its peer group. Randgold has no debt and has the ability to gear up, with a $200m revolving credit facility already available to draw from.” Shares closed 1.4 per cent lower at £43.66.