Numis looks past challenges at Tongon, reiterates 'buy' on Randgold Resources
Analysts at Numis reiterated their 'buy' recommendation and 9000p target price on Randgold Resources's shares despite its third quarter earnings 'miss' on the back of higher costs and lower gold sold as a proportion of output.
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Indeed, cash costs printed at $667/oz., versus Numis's forecast for $606/oz, due to a combination of factors, including as a result of a higher strip ratio at its Loulo-Gounkoto and Tongon mines.
Instead, the analysts highlighted the 8.5% quarterly increase in cash from $572m at the end of the previous quarter to $621m and management's decision to reiterate their full-year guidance.
In particular, the directors reaffirmed their intention to return to shareholders cash in excess of its targeted $500m.
As well, the compamny's free-cash-flow remained positive over the latest period.
"This was a relatively challenging quarter with Tongon specifically facing issues that drove costs up from US$639/oz to US$800/oz, however, guidance remains intact and the company continued to generate positive FCF."