Africa-focused gold producer Randgold Resources (LON:RSS) said Monday its full-year profit from mining dropped by 11%, hit by a continued weakness in the prices metal, which lost about 10% of its value in 2015 for a third straight annual decline.
The company said profit for the year ended Dec. 31 fell to $572.2 million, compared with $643.1 million a year earlier.
However, the London-listed miner said it still intends to increase its annual dividend by 10% to 66 cents a share.
“It’s easy to achieve when the stars are all aligned but it’s a lot more difficult in a market as challenged as this one, which makes these results even more pleasing,” Mark Bristow, chief executive.
Randgold, which mines the precious metal in West Africa and the Democratic Republic of Congo, produced a record 1.21 million ounces last year at an average cost of $679 an ounce. It’s targeting output of 1.25 million ounces to 1.3 million ounces this year.
As the gold sector shows strong signs of recovery, Randgold Resources is tempering expectations of making big acquisitions in the short term.
Unlike its rivals in the mining sector, which have been battered by a severe rout in commodity prices, Randgold has remained relatively strong. As a result, the firm said it would continue to invest in exploration, which remains the engine that drives its business, and would also keep expanding its footprint in target areas.
Bristow said Randgold had reviewed all its mine plans in the light of current conditions with a focus on true returns and break-even cash flows. As a result of this, Loulo-Gounkoto and Kibali now both forecast annual production of +600 000 ounces at a total cash cost of around $600 per ounce or below, Loulo-Gounkoto for 10 years and Kibali for 12, while Tongon was forecasting to produce an average of more than 300 000 ounces for five years.
Randgold has been eyeing deals as one of the best-performing miners during the commodities downturn, hoping that indebted competitors would be forced to part with some of their best assets in fire sales.
But as the gold sector shows strong signs of recovery, the company is tempering expectations of making big acquisitions in the short term.
The stock has rallied 45% so far this year and it closed up 3.3% to 5,473p in London.