Randgold Resources confirms full year dividend increase

Randgold Resources confirmed its intention to increase its final dividend for the last full year and said while the size of its remaining gold resources had shrunk there had been an increase in the reserve grade.

The FTSE 100-listed gold miner proposed a 52% year on year increase in the dividend to $1 per share for the year ended 31 December 2016 for approval at its annual general meeting on 2 May 2017.

With $500m cash now in the bank, chief financial officer Graham Shuttleworth said that in future Randgold intends to continue to pay an annual dividend "that will take into account its profitability, cash flows and the wider capital requirements of the group in the context of its financial position, including its expected cross-cycle operating cash flows and its cross-cycle capital expenditure requirements".

He said the $500m will provide financing flexibility should a new mine development or other growth opportunity be identified.

"To the extent that Randgold has surplus capital, the company intends to return such excess to shareholders," he said.

As part of its annual report, Randgold also confirmed its attributable proved and probable reserves had shrunk 1% due to the record levels of production last year, with total attributable resources of 25.5m ounces, down 8%, reflecting mining depletion and changes to the method of reporting underground resources at Kibali.

But reserve grades increased from 3.6 grammes per tonne to 3.7g/t, which chief executive Mark Bristow said showed that Randgold has been able to replenish ounces at grades above or equal to its reserve base despite the high depletion rate from mining.

"This means our current reserves have secured our business plan for at least 10 years of profitable production. In the meantime, our exploration teams continue to hunt for additional ounces to replenish these reserves as well as for our next big discovery," he said.