Numis cuts rating on Randgold Resources to 'add' from 'buy'

2nd Feb 2017 09:08

(ShareCast News) - Numis on Thursday downgraded its rating on Randgold Resources to 'add' from 'buy' and reiterated a target price of 8,000p, citing the mining company's recent share price appreciation.On Monday Randgold said negotiations were under way to resolve a protest at its Tongon mine on the Ivory Coast. About 100 employees have staged an "illegal sit-in" since the end of last week, demanding annual ex gratia payments, the miner said.Numis expects the company will lose 1,300 ounces of production over that period. "However, mining activities continued during the six day plant stoppage and some of the lost throughput may be caught up in the quarter and year," the broker said.Numis also noted Randgold's production rebounded in the third quarter following a difficult second quarter. In November Randgold reported a 7% increase in gold production to 301,163 ounces in the third quarter, boosted by strong performances at the Tongon and Kibali mines.The miner is on track for a "strong end" to 2016, Numis said. The company reports its full year production figures next week.Randgold in November said its forward guidance was 290,000 ounces per year for the 2017 to 2020 period. The group's exploration is focused on satellite ore sources on the Tongon permit to extend its mine life. Randgold is also looking to advance a prospective package of regional exploration permits elsewhere in Cote D'Ivoire, including Boundiali and Mankono.Shares rose 1.81% to 6,735p at 0942 GMT.