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My criteria for adding a gold stock to my long-term 50 Stocks portfolio have been reasonably consistent over the years: I’ve looked for a gold miner that was growing gold production and reducing production costs.

Up until my latest revision of this portfolio in early 2018 Yamana Gold (AUY) fit that bill. The company had rapidly grown production, mostly through acquisitions it’s true, and lowered production costs. But then in 2017 the company struggled to unload two mining properties that it had acquired–Pilar and C1 Santa Luz–that had failed to deliver gold as forecast. Yamana first spun them off much of its interest through a rights offer, having failed to find a buyer, and then, in 2018 finally sold the assets completely. Whether it was a coincidence or, more likely to my way of thinking, because management was so focused on getting rid of these assets, Yamana hasn’t driven costs down as fast as its competitors in recent years, allowing the best of them to close the gap that had put Yamana at the top of the low cost heap.

With those developments, I dropped Yamana from the 50 Stocks Portfolio. Which has been without a gold mining company since then.

Until today.

Today, I’m adding Randgold Resources (GOLD) to my 50 Stocks Portfolio. The company had what I regard as a temporary stumble in its most recent quarter. That hasn’t changed the attractive long-term fundamentals but it has created a decent if not jump up and down in glee buying opportunity in the shares, which closed at $79.91, up 0.25%, today, May 14.

Here’s the Randgold story in brief. In 2017 the company recorded a seventh straight year of record gold production. Output climbed by 5% to 1.315 million ounces. And that’s with production set to increase at the relatively new Loulo-Gounkoto complex. Add in the Tongon mine, that began gold production in 2010 and Kibali mine, where Phase 1 production began in 2014 and Phase 2 production began in December and Randgold has the kind of growth profile I’m looking for.

At the same time, thanks to improving ore grades and significant cost controls, the cost of production has been falling. In 2017 the cash cost per ounce of gold fell to $620, the lowest in seven years and 3% lower than in 2016.

As a result EBITDA (earnings before interest payments, taxes, depreciation, and amortization) climbed to 51.6% in 2017, up 332 basis points. Standard & Poor’s projects that EBITDA will climb to 53.0% in 2018 and 54.5% in 2019. Earnings, again according to S&P, will grow 16% in 2018 and 15% in 2019.

Now about that first quarter stumble. Production was down and costs were up. The company had flagged those problems in advance of the report–it was working through lower ore grades at Loulo-Gounkoto on the way to higher ore grades at the mine, and production had also dropped on labor disruptions at the Tongon mine. At $79.91, the shares are significantly below the 52-week high of $108.29.

Two other items of importance.

First, Randgold operates in some of the most difficult geopolitical landscapes in mining. But the company has a long history of doing business in countries such as Mali and the Democratic Republic of the Congo and has been reasonably successful in figuring out how to navigate these currents.

Second, the company has doubled its dividend to $2 a share (since cash reserves of $740 billion seemed adequate for foreseeable needs.) Which gives the stock a 2.51% yield, extraordinary for shares of a gold mining company.