Questor was neutral on Randgold shares for some time, but recommended a purchase after the shares slumped 13 per cent following a military coup in Mali, where the company’s flagship Loulo mine is to be found. The shares were at 57.65 pounds. However, since then the tumbling gold price and a weak set of first-quarter figures has ensured the price continues to fall. Earnings per share in the first three months came in at 94p, 13 per cent lower than consensus expectations. The fall was not down to the Mali coup, but was caused by production issues in Ivory Coast. The company’s expansion plans should also lead to a significant rise in profits this year. Mark Bristow, chief executive, spent 652,478 pounds buying 13,480 shares at 48.40 pounds on May 18. Graham Shuttleworth, the chief finance officer, also spent 142,209 pounds buying at the same price. The shares are trading on a December 2012 earnings multiple of just 12.7 times, falling to 10.4, which is a significant discount to its recent rating. This reflects uncertainty over the gold price. However, Randgold’s total cost of mining each ounce in the first quarter was 751 dollars. The shares look oversold and Questor says buy.

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