Randgold in robust cash position despite lower gold price

Randgold Resources was in a surprisingly robust position in its end-of-year-results, despite lower gold prices pushing the company's profit down in the 12 months to 31 December 2015.

Production and costs were in line with the company's annual guidance, with the FTSE 100 company setting a new production record of more than 1.2m ounces - up 6% on the previous year.

Group total cash cost per ounce was down 3% to $679 (£467.60) per ounce. In the fourth quarter, that was down to $632 per ounce.

The firm reported strong cash flows from operations, boosting cash on hand by 158% to $213.4m, though profits for the year were down due to lower gold prices - to $212.8m from $271.2m a year earlier.

Nevertheless, Randgold's board proposed a 10% increase in the annual dividend, which the board said reflected the strong cash flows generated by the business.

"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", said chief executive Mark Bristow.

He attributed the company's robust showing to improved plant throughput, ore feed and grade management; reduced underground mining costs at Loulo following its transition from contract mining to owner mining; lower input costs, and improved efficiencies across the board.

"Randgold is now in a unique position to continue delivering value to all its stakeholders", said Bristow.

He believed the company's mines could continue to generate cash flows at gold prices well below the $1,000 per ounce level, with the company's positive production and cost profile extending beyond 10 years.

"Our exploration teams are not only replenishing the ounces we mine, but are making significant progress in the hunt for our next big discovery. And when they find it, we can afford to build our next new mine without recourse to the market, thanks to our robust balance sheet", he concluded.