JOHANNESBURG (miningweekly.com) – London-listed Randgold Resources' flagship Loulo-Gounkoto complex, in Mali,  was the star performer in the first quarter of the year, partially offsetting the impact of the challenges hindering the group’s other operations.

 Despite commissioning and technical issues impacting the Kibali mine, in the Democratic Republic of Congo, and the Tongon mine, in Côte d'Ivoire, during the three months to March 31, Loulo’s robust performance enabled a 19% quarter-on-quarter and 25% year-on-year surge in profit for the period to $63.9-million.

Basic earnings a share increased 21% quarter-on-quarter and 12% year-on-year to $0.58.

Loulo’s transition from contract mining to owner mining led to improved efficiencies and lower operating costs, resulting in total group cash costs, at $189-million during the first quarter of the year, to fall some 8% when compared with the preceding quarter, said Randgold CEO Mark Bristow.

A decrease in production at the Loulo-Gounkoto complex, Tongon and Kibali led to a 11% decline in output to 291 912 oz compared with the preceding quarter; however, this was partially offset by a 9% increase in the average gold price received to $1 187/oz.

Gold sales for the quarter of $345.8-million decreased 3% quarter-on-quarter.

Speaking to Mining Weekly Online during a telephone interview, Bristow explained that the company had, despite facing unplanned challenges during the first quarter of 2016, outperformed the achievements of the prior corresponding quarter.

The Loulo-Gounkoto complex produced 172 554 oz – Loulo with 99 101 oz and Gounkoto with 73 453 oz – which, while a 6% drop on the fourth quarter of the prior year, represented a 34% surge on the corresponding period the year before.

The cash cost per ounce from the operation for the period under review decreased 6% quarter-on-quarter and 29% year-on-year to $551/oz.

The challenges faced by Kibali in the first quarter resulted in a drop in recoveries and consequently a 15% drop in gold production to 130 577 oz – 58 760 oz of which was attributable to Randgold – with cash costs increasing from $621/oz in the fourth quarter of 2015 to $740/oz in the quarter under review.

“At Kibali, the two mill circuits, usually split between sulphide and oxide ores, were both campaigned on sulphides for an extended period in preparation for the ramp-up in underground ore. Interruptions associated with this process before its successful completion, compounded by a week-long breakdown of one of the ball mills, negatively affected production and costs,” Randgold explained.

Meanwhile, production from Tongon was hampered by the longer-than-expected commissioning of the new quaternary crushing circuit and recurring power interruptions.

The operation produced 54 122 oz of gold during the three months to March, a 20% fall in the preceding quarter, partially owing to a 6% decrease in throughput and 13% decrease in head grade milled.

Tongon’s total cash cost increased 17% to $900/oz during the quarter under review.

Randgold’s Morila operation, in Mali, delivered a steady performance with lower costs and remained profitable during the first quarter of the year.

Gold production for the quarter of 16 191 oz – 64 76 oz attributable – was 7% below the previous quarter's production, mainly owing to lower plant throughput of 769 000 t after the ball mill gearbox replacement and mill relining.

Total cash costs improved to $915/oz during the three months to March, compared with the $1 060/oz in the previous quarter.

The company was continuing its preparations for the transition to the treatment of tailings, while discussions with the government and the local community regarding the Domba project were ongoing.

Overall, Bristow said, targets and guidance set for the year would be maintained, as all the operations were now back on track.

“With our strategy, plans and projections intact, we are able to continue delivering value at current and even lower gold price levels,” he said.

“We are quite bullish about gold's medium- to long-term prospects and when the cycle turns, the work we do now will have equipped us to capitalise fully on the upside.”