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UPDATE 1-Gold miner Randgold hikes dividend as costs fall, output rises
February 9, 2015 / 11:42 AM / 3 years ago

UPDATE 1-Gold miner Randgold hikes dividend as costs fall, output rises

(Adds forecast and details from statement, analyst quote)

Feb 9 (Reuters) - Africa-focused miner Randgold Resources Ltd said it would raise its final dividend to 60 cents per share from 50 cents as a fall in cash costs and a rise in its cash pile acted as a buffer against lower gold prices.

The gold miner has proven more resilient than most of its peers to a falling gold price, having calculated its reserves using a $1,000 benchmark even as the yellow metal tumbled to a more than four-year low in November.

Gold prices slipped about 1 percent in 2014 to as low as $1,137.40 an ounce, compounding a 28 percent fall in 2013, forcing many miners to scrap dividends, halt projects and shut mines in an attempt to survive.

But, Randgold said on Monday gold production rose 26 percent in 2014, while total cash costs fell 2 percent. The company ended the year with no borrowings, while cash and cash equivalents more than doubled to $82.8 million.

"The now rising cash pile has resulted in a nice rise in dividends, which we would expect to remain strong going forward if Randgold finds no other use for it", Oriel Securities analyst Nick Chalmers said in a note.

The prolonged period of low gold prices might be an opportunity for Randgold to buy assets, Chief Executive Mark Bristow has said, a stance he reiterated on Monday saying, "we are closely monitoring this situation".

However, the tumble in gold prices pulled the company's profit for the year down nearly 17 percent to $271.2 million.

Randgold said it expects to produce between 1.20 and 1.26 million gold ounces in 2015, up from 1.15 million in 2014, as production at its Kibali mine in the Democratic Republic of Congo continues to ramp up.

Shares of the company, which also mines in Mali and the Ivory Coast, rose as much as 2.2 percent to 5425 pence, while London's FTSE-100 index was off about 0.5 percent. (Reporting By Mamidipudi Soumithri in Bengaluru; Editing by Gopakumar Warrier and Savio D'Souza)

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