In an effort to alleviate a Q1 earnings fall following a dip in gold prices, officials at South Africa’s Randgold Resources have announced major spending cuts—including what portends to be the closure of a major mine.
The Johannesburg-listed miner, after a mild recovery from 4% losses, said it would cut expected output at its primary Loulo-Gounkoto mine to 560,000 gold oz, down from 590,000, as Q1 gold prices hit their lowest level since Q2 2011. Nonetheless, Randgold retained its 2013 production forecast at between 900,000 to 950,000 gold oz.
Cost targets, however, would remain stable, according to Randgold officials, following a $50 million reduction from this year’s fiscal requirements for their new Kibali mine in the Democratic Republic of Congo (DRC), anticipated to begin in 2013. Improvements at Randgold’s fire-stricken Tongon asset in the Ivory Coast and improved production at its Morila joint venture in Mali, meanwhile, have boosted production outlook.
At a time of worker unrest and soaring costs across Africa and the Sahel region, CEO Mark Bristow has been credited for keeping Randgold productive. “We’ve got swings and roundabouts,” Bristow told reporters, adding the revisions allow for more gold production “than we forecast in Kibali—so that’s why we haven’t changed our guidance.”