Randgold Seeks to Add More Mines as Price Gains Boost Profit 55%

(Bloomberg) -- Randgold Resources Ltd. will seek new mining projects as rising gold prices and cost cuts increased the company's earnings by 55 percent in the third quarter.

“Our target is to have three projects defined in the next five years,” Chief Executive Officer Mark Bristow said Thursday. “We've got some very exciting new projects. That gives us a new base on which to continue to grow the company.” Projects in Senegal, Ivory Coast and the Democratic Republic of Congo could eventually become mines, he said. 

Net income rose to $65.6 million from $42.3 million a year earlier, Jersey, Channel Islands-based Randgold said in a statement on Thursday. Gold output slipped 1.4 percent to 301,163 ounces, while its costs per ounce dropped 5.2 percent to $663.

Full-year output will be in the lower half of a 1.25 million to 1.3 million-ounce target range. That's after the company suffered production setbacks at mines in the DRC and Ivory Coast in the second quarter.

Production was “slightly behind” expectations, Kieron Hodgson, an analyst at Panmure Gordon & Co. in London, said in a note. BMO Capital Markets said the results missed its estimates.

Randgold shares, the best performing for a major producer in the past decade, dropped 5.1 percent to 7,195 pence by 9:28 a.m in London after earlier sliding by the most since Oct. 4.

Gold producers have been buoyed by a 22 percent jump in gold prices this year to about $1,300 an ounce. The Bloomberg Intelligence Global Senior Gold index of major miners has almost doubled this year, the best performance in data going back to 2006. Randgold, which also mines in Mali, is up 73 percent.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net. To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Tony Barrett, Nicholas Larkin