Randgold trims its production target for 2013

 
Suzie Neuwirth
FTSE 100 gold miner Randgold Resources’s shares tumbled 5.9 per cent yesterday morning, after first quarter results unveiled profits of $81.6m (£52.4m), down 43 per cent on the previous quarter.

The disappointing figures were attributed to the recent fall in gold prices, as well as production problems and unsold stock at a mine complex in Mali. Production estimates for the year at the affected complex have been reduced from 590,000 to 560,000 ounces, while capex and working capital have each been reduced by around $20m.

However, chief executive Mark Bristow said that aside from the Mali complex, the company’s full-year production and cost targets remain within previous guidance.

“While Randgold remains strongly placed to sustain its profitability under any realistically conceivable gold price scenario, we have nevertheless reviewed each operation’s plans in the light of the recent drop in the price, making adjustments where necessary to ensure we manage our cash flow given this year’s large capital spend,” he said.

After plummeting in the morning, Randgold’s share price rallied in the afternoon and closed up 0.2 per cent at 5,120p.

“Appetite for shares revived after digestion of a statement suggesting free cash flow generation of $500-600m from 2015, an improved dividend policy from 2014 and a hike in interim dividend,” said Mike van Dulken, head of research at Accendo Markets.