Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Randgold stock took a battering on Thursday morning after the UK based miner posted an 8% profit drop for Q2. Even the market’s inflated gold prices over recent months couldn’t offset Randgold’s surprise fall in production, as the company weathered one of its toughest quarters in years.
The gold producer saw output slump 7% at its Tongon mine in Côte d’Ivoire after a mill breakdown, while Kibali, its DRC location, reported a 6% decrease for the quarter due to operational setbacks and low grade extractions. Earnings missed analyst estimates, coming in at US$0.52 a share, down from $0.57 last year. Gold sales revenue dropped to $354.4 million, despite higher gold prices.
The company remained optimistic that the second half of 2016 would generate better results. “Looking ahead at the rest of the year, all our teams have been reworking and optimising their mine plans to ensure that we end 2016 within guidance.” said Chief executive Mark Bristow. That will mean producing a total of 1.25 million oz of gold. So far this year Randgold has extracted 573,000 oz. The company will now rely on its flagship mine in Mali to make up the output deficit from Tongon’s down time.
“In addition, we’re intensifying our focus on critical operational issues to ensure that we deliver a substantial second-half improvement,” Bristow concluded in a statement to investors. “The quality and scope of our exploration portfolio continue to grow and there is a solid pipeline of projects being developed through our resource triangle, from grassroots and generative work to resource definition.” The company currently has 3 sites scheduled for drill test campaigns in northern Côte d’Ivoire and Senegal. Production costs have had a bruising influence on the miner’s bottom line, with low grade extractions driving up expenses.
Cash holdings were a bright spot in the earnings report, up 7% to US$272.7 million. Increased gold sales also boosted net income to US$123 million for the first 6 months of the year, up 11% from the same quarter of 2015.
Randgold saw its stock surge after Britain voted to exit the European Union, spiking 35% over the last 3 months. Even with today’s sell off, Randgold shares are still up over 90% on last year’s numbers as investors flock to gold assets.
