Randgold hints at possible M&A amid squeeze on gold mining industry

LONDON (ShareCast) - Africa-focused gold producer Randgold Resources said it sees the potential for further growth outside its core operations, hinting at possible acquisitions in the near future amid a "stressed mining sector". Financial details of 2014 were already announced last month - output rose 26% to a record 1.15m ounces - though the company did reveal in its annual report on Monday that attributable reserves for last year were up 0.8% at 15.2m ounces.

Chief executive Mark Bristow said the company could take advantage of growth opportunities being generated by the current squeeze on the gold industry.

Bristow said: "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 added: "The current stress in the gold mining industry is [...] generating what may well prove to be transformational growth opportunities and we are closely monitoring this situation." The frontman also said the company's long-standing goal of reaching annual production of 1.2m ounces in 2015 is "now comfortably within reach".

The group's recent action to align the business with a lower gold price means that it can sustain profitability even at a $1,000-per-ounce gold price level.

Meanwhile, Randgold - which had already announce it had increased its 2014 final dividend 20% to 60 cents a share - said it intends to continue with a progressive dividend policy "that will increase or at least be maintained annually".

Chief financial officer Graham Shuttleworth said that the company also intended to build its net cash position to approximately $500m to provide financing flexibility for future new mine developments and/or other growth opportunities.