This is Randgold Resources’ twentieth annual report and it is a major milestone in the company’s remarkable journey over two decades from a small exploration business to the industry leader it is today.
It records a year of significant achievement in the face of considerable challenges. Even at a time of declining gold prices, Randgold has continued on its upward path. Guided by a clear long term strategy, which has been stress-tested over the past three years, the company has met its production and cost targets, setting a new production record in the process. It has successfully adapted its operations to the challenges of the current market, ensuring that they will generate cash flow at gold prices well below the $1 000 per ounce level. By carefully balancing its mining plans, it has secured profitable production and cost profiles that extend over the next 10 years and beyond.
Randgold’s robust performance, and strong cash flows from its mines, have enabled it to continue investing in its future, and its capital programmes remain intact. There has been no need to postpone or downsize growth projects, no write-down or impairments. At the end of the year, the company remained debt-free, with more than $200 million in cash on hand. When Randgold discovers its next world-class gold deposit, it will be able to fund the development of its sixth mine without recourse to the market.
The 2015 average gold price of $1 152/oz was down 9% on the previous year and this inevitably had an impact on the company’s profit. The board is nevertheless confident about Randgold’s ability to continue delivering value and so it has recommended a 10% increase in the annual dividend, subject to shareholder approval at the annual general meeting. It is worth noting that during the year, the Randgold share price again outperformed the gold index while many gold companies were trading at pre-2005 levels.
To read the full chairman's statement, download the PDF below.