Notwithstanding a significant depletion as a result of mining in a year that delivered a record production of 1.15-million ounces, gold producer Randgold Resources succeeded in increasing its total attributable ore reserves by 0.8% in the 12 months ended December 31, 2014, to 15.2-million ounces.

In contrast, the company’s gold resources decreased by 3% to 27.8-million ounces over the year, as production efficiencies boosted the company’s extractive ability.

“We are committed to replacing the ounces we mine through our ongoing brownfield exploration and drilling programmes,” Randgold reserve and resource management executive Rod Quick said in a statement last week.

The group says in its annual report that it intends to continue paying a progressive ordinary dividend that will increase or, at least, be maintained yearly.

Thus, the board proposed a 20% increase to $0.60 a share in the 2014 dividend for approval at its annual general meeting on May 5.

“The company also intended to build its net cash position to about $500-million to provide financing flexibility for future new mine developments or other growth opportunities,” notes CFO Graham Shuttleworth.

Randgold’s total reserves in Kibali, in the Democratic Republic of the Congo, have decreased to 11-million ounces, at 4.1 g/t, from 11.6-million ounces, at 4 g/t, as a result of depletion, partly offset by gains in underground reserves and the conversion of the Gorumbwa openpit resource to reserves.

At the Loulo mine, in Mali, reserves decreased to 4.9-million ounces over the year owing to mining depletion. Drilling continues to test the depth and strike extensions of the two principal orebodies, Yalea and Gara, and is expected to deliver resource increases this year.

The neighbouring Gounkoto mine saw total reserves increase to over three-million ounces on the back of the completion of the underground feasibility study, which added 900 000 oz to the reserve base.

“There is still real potential to expand this reserve through ongoing drilling and optimisation work,” said Quick.

In Côte d’Ivoire, Tongon’s resources have increased and reserves have been replenished by ongoing orebody gains from advanced grade-control drilling within the pit.

Drilling continues to highlight the potential for further gains within and immediately below the current pit design, which will be tested this year.

Unlike most players in the gold mining industry, Randgold has not found it necessary to write down its reserves and resources as the gold price drops, as it has calculated its reserves at $1 000/oz and its resources at $1 500/oz for the past four years, says Randgold CEO Mark Bristow.

“We have looked closely at all our mines to ensure that they will still be profitable at $1 000/oz and we’ll continue to review our operations against a range of gold price scenarios.

“With the inclusion of Gounkoto underground, we are now able to demonstrate a ten-year plan of over one-million ounces of production a year and all our operations will be profitable at a $1 000/oz gold price, which is unique in the industry,” he says.

The company, meanwhile, says that it continues to look at growth opportunities generated by the current “squeeze” on the gold mining industry.

Bristow notes in the company’s annual report that Randgold has “solid” operations with strong cash flows, a “robust” balance sheet with no debt and substantial cash, and a share price that has, for years, consistently outperformed the market.

Moreover, Randgold’s five-year forecast shows a growing production profile and a reduction in costs.

“Organic growth will remain our core driver but, as we look ahead from this position of strength, we will consider opportunities that are often generated by stressed markets and may well elect to play a part in the likely restructuring of the gold mining industry,” he says.

Chairperson Christopher Coleman remarks in the report that the industry’s overall operating environment is more complex now than it has ever been.

“The board and management continue to look closely at all the realistically conceivable scenarios for the next five years, identifying the opportunities and obstacles that lie ahead, and incorporating them in our planning,” he concludes.