Randgold shares fell back following its second-quarter update, which detailed a reduction in output from its flagship Loulo mine in Mali after power shortages and lower grades of gold hampered performance. Total gold production in the quarter was down 17 per cent and costs per ounce rose, although, with the benefit of higher selling prices, the realisation of a stake in Volta Resources and the write-back of a provision, half-year pre-tax profit increased 59 per cent to $67.9m (£42.7m).
While management believes it has resolved the problems it suffered at Loulo in the first half of the year, it has guided production forecasts for the mine 5-10 per cent lower for the full year. Elsewhere in the portfolio, the Morila mine in Mali also saw production dip, in line with expectations. The second half should see some contribution in the fourth quarter from the Tongon project in Cote D'Ivoire.
When: 23 January 2009
Price: 2,724p
Performance to date: - 104%
