In the midst of acquisition talks and with a share offering around the corner, Randgold Resources (LSE: RRS) reported on its Q2 results and production updates from its key projects, boasting a 45% quarter on quarter hike in profits.
Randgold’s profits jumped to USD 18.9 billion in Q2, driven primarily by the 10% increase in attributable gold production to 121,685 ounces and the 3% rise in gold prices. Yet the profits attributable to shareholders actually declined to USD 14,946 million from USD 17,911 million for the equivalent period of 2008.
Randgold has been keeping itself with busy with acquisition talks with Moto Goldmines (AIM: MOE), which recently said Randgold’s offer was superior to that of Red Back Mining (TSX: RBI). Randgold has also announced a global offer of 5,000,000 new ordinary shares, to be conducted through a bookbuilding process which is expected to be completed in late afternoon tomorrow. The price at which the new shares are issued will be announced soon thereafter.
The proceeds will fund the feasibility studies for Randgold’s Gounkoto and Massawa projects. Prefeasibility study on Massawa is projected to be completed by the end of the year. Should Randgold acquire Moto, the money will also be used to fund Moto’s gold project in the Democratic Republic of Congo.
As for the production update, the company said its Luolo complex in Mali has increased production and cut the cash costs, mostly owing to higher ore grades and improved throughput. Randgold said the development of its Tongon mine is on track and gold production is expected to start in Q4 2010.
Randgold’s stock lost more than 3.5% on the Q2 update today, bringing the share prices down to 3,895p
www.proactiveinvestors.co.uk
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