The London-listed and South African-led Randgold Resources, which increased net profit by a significant 41% and cash generation by an even greater 39% in the March quarter, is accelerating along its laudable ‘discovery and development’ path, its latest find being the promising Gounkoto gold prospect, in Mali, and its new Massawa deposit, in Senegal, being advanced to prefeasibility status.

Randgold Resources CE Dr Mark Bristow, a former South African university geology- academic-turned-gold-entrepreneur, continues to prove that discovery and development in capable hands present far less risk and generate far more cash than the investment-banker-glamourised merger-and-acquisition (M&A) route.

Bristow, the founder and developer of the 14-year-old South Africa-germinated Randgold Resources, is, however, now sitting on a $28,3-million cash war chest that gives the company the wherewithal to engage in any accretive credit-crunch-induced M&A opportunities.

While Randgold Resources’ attributable production was up by only a modest 3%, to 110 313 oz quarter-on-quarter, gold sales rose by 12%, to $87,3-million, and the company increased its attributable reserves after depletion by 14%.

Total cash costs of $461/oz were in line with figures for the previous quarter.

Randgold Resources was able to ramp up its self-discovered four-million-plus-ounce Tongon gold development in Côte d’Ivoire, adding to its other major discoveries of the 7,5-million-ounce Morila deposit in southern Mali and the seven-million-plus-ounce Yalea deposit at Loulo, in western Mali – the prospectivity of which is now enhanced by Gounkoto – enabling it to total some five-million ounces of gold production since inception and distribute more than $1,2- billion to its stakeholders.

Bristow said that, while the company had more than met its financial and operational targets for the March quarter, its real achievement was its progress on a range of expansion, development and exploration projects designed to ensure sustainable production and profitable growth.

Loulo increased production by 17%, to 70 826 oz, owing to higher ore grades and a slightly higher throughput, achieved in spite of a planned nine-day shutdown required for the plant expansion project, which will raise production by some 30%, to 300 000 t/m.

The increased production was reflected in a 4% reduction in total cash costs an ounce.

Production at Morila, which is living out its last days as a stockpile treatment operation, was down 16% at 98 718 oz, in line with the mine’s operational plan.

The Yalea underground mine development, which, along with the plant expansion, is expected to increase Loulo’s total production to 400 000 oz/y by 2010, made a record advance of 605 m in March, keeping the project on track to achieve its goal of ramping up to 120 000 t/m of ore by the end of this year.

The planning of Gara, the second under- ground mine at Loulo, is being finalised with development scheduled to start in January 2010.

Massawa has been confirmed as a “very robust” project with a first inferred resource of 3,39-million ounces, capable of returns of 20%-plus at a gold price down to $650/oz. Drilling for a prefeasibility study, due for completion by the end of this year, has been given the green light.

The new Gounkoto’s drill intersections have returned the high grades of 16,53 g/t at 60 m and 43,52 g/t at 11 m.

“This is a very exciting discovery – I have always said the Loulo region has legs and this certainly highlights its continuing prospectivity,” says Bristow.

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