Financial review

“Given Randgold’s commitment to growing through discovery and development, the company will continue to commit significant expenditure to exploration.” 

Gold sales for the year ended 31 December 2016 of $1.55 billion, including the attributable share of equity accounted joint ventures, 

were up 11% from the previous year principally as a result of the 8% increase in the average gold price received of $1 244/oz (2015: $1 152/oz), as well as a 3% increase in the number of ounces of gold sold across the group. Total cash costs for the year of $794.4 million (2015: $822.7 million) dropped by 3% on the prior year, driven by lower unit costs, especially at the Loulo-Gounkoto complex. Group total cash cost per ounce dropped 6% to $639/oz for the year (2015: $679/oz), reflecting the 3% increase in ounces sold year on year, as well as the 3% decrease in total cash costs.

At the Loulo-Gounkoto complex, gold production increased by 12% to 707 116oz (Loulo 419 801oz and Gounkoto 287 315oz) against 630 167oz in the prior year. Total cash cost per ounce for the year at the complex was 17% lower at $563/oz (2015: $675/oz) reflecting the increase in ounces produced and lower operating unit costs. Tonnes processed during the year was higher than the previous year, following the completion of the plant upgrade projects and improved operating performance of the plant, which also reflected in an increase in recoveries for the year. At Morila, total cash costs for the year increased to $1 113/oz (2015: $674/oz), reflecting the lower grade ore mined and lower production following the transition from feeding full grade ore to tailings storage facility (TSF) retreatment. Production at Tongon increased by 7% to 260 556oz, with increased grade, throughput and recoveries in the second half of the year. This followed the completion of the crushing circuit upgrade earlier in the year, and notwithstanding the mill downtime in the second quarter, led to a drop in total cash costs to $771/oz for the year (2015: $836/oz).

At Kibali, production dropped to 585 946oz (2015: 642 720oz) on the back of lower grade ore processed and lower recoveries, while total cash costs increased to $736/oz for the year (2015: $604/oz).

After a number of operational issues experienced in H1 2016, including issues related to plant stability and dealing with the multiple ore sources, Kibali produced a credible second half performance as it addressed the critical issues identified, with throughput for the year above nameplate capacity and recoveries improving in the fourth quarter. Across the group, costs were positively impacted by lower oil and fuel prices, while the euro:dollar exchange rate remained relatively consistent year on year. 

To read the full financial review, download the PDF below.
Graham Shuttleworth
Financial director and chief financial officer
Sustainably profitable
(English, PDF, 2.42 MB)