Hambro favourite Randgold hit by “series” of production setbacks

Randgold Resources, a top holding of Evy Hambro’s BlackRock Gold and General fund, has seen its share price slide after revising down its 2011 production guidance.

Evy Hambro
Evy Hambro

The FTSE 100-listed gold miner says a “series of setbacks” at its Tongon mine in Côte d’Ivoire will hamper its production over the fourth quarter of 2011. Its share price was down 8.27% to 6,215p as of 1532 GMT.

Randgold accounts for 5.2% of Hambro’s £3 billion BlackRock Gold and General fund. It is also found in the top-ten holdings of Ian Henderson’s £2.2 billion JPM Natural Resources fund and James Syme and Paul Wimborne’s £1 billion Baring Global Emerging Markets fund.

The company says Tongon’s fourth-quarter production will be affected by persistent wet weather, mining through transitional ore, difficulties in connecting to the Côte d’Ivoire’s national grid and strikes prompted by a dispute with a newly-created union.

In addition the mine is currently suffering a break in production, as a fault in the barring gear at one of its mills caused operations there to be put on hold.

“Management has acted promptly to remedy these issues and minimise their impact on production but their compounding effect will have a negative impact on the mine’s Q4 production,” a statement by the firm says.

Rangold also reports that its Loulo mine in Mali has seen production come in lower than expected due to ongoing work on its tailings pipeline and the expansion of a third mill. It anticipates production will re-align with the forecast over the quarter.

Due to the Tongon and Loulo setbacks, the firm has lowered its production guidance for 2011 from the 740,000 to 760,000 ounces it forecast at the start of November to 690,000 to 700,000 ounces.

Earlier this month, Randgold reported that profits increased to $122.9m (£79.6m) in the third quarter, driven by the increase in gold prices over the past year.

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