Mark Bristow, CEO, Randgold Resources
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Randgold to expand Ivory Coast project
David McKay
Posted: Thu, 05 Jul 2007

[miningmx.com] -- RANDGOLD Resources, the $1.52bn gold producer and exploration firm, may target a quarter more gold from its Tongon gold prospect in the Ivory Coast, said Mark Bristow, CEO. "If there's a bigger mine to do, we will do it," he said.

"We're very upbeat about the opportunity in the additional area," Bristow said of a northern portion of Tongon that could take gold output to 250,000 oz/year from its current scope of 200,000 oz/year. "Anything above 250,000 oz/year would be a bonus," said Bristow who was speaking to journalists at an investment presentation in Johannesburg.

First gold production from Tongon, the Ivory Coast's first major commercial gold mine, is expected in "the backend of 2010," he said.

In that year, Randgold Resources will be producing just over 600,000 oz/year of attributable gold output. It expects 2007 attributable gold production to be 400,000 oz, Bristow said.

In 2004 money, Tongon was expected to cost about $111m, but if the additional gold resources were added to the project, the capital cost would nearly double to between $200m to $220m, Bristow said.

Bristow said the world's gold industry's combined market capitalisation had grown to about $250bn from $40bn in 1999 when the gold price hit a low of $252.80/oz. However, he believed the increased market value was predicated on large mergers and acquisitions which did not add value.

The company had been involved in two due diligences this year, but as yet had not recognised anything worth pursuing. "In the last three years we have looked at companies some of which have been five times our size. But we won't be running around issuing shares," he said of potential corporate activity.

Randgold Resources had also built the Morila gold mine in Mali and Loulo which will make Tongon is third major project. Bristow believed the Ivory Coast was a safe country in which to operate and the company was virtually 100% certain it would dig a new mine there.

On March 29, Bristow said Randgold Resources had put together a team to scour African countries that many would consider risky for new gold mining opportunities, and the company has the prospects to add another one million gross ounces to its projects, matching the 2006 performance.

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Randgold is working in five West African nations and Tanzania in the east, but it is now aggressively looking at more risky nations for first mover advantage, Bristow told Miningmx.

Rod Quick, who was behind the Tongon project in Ivory Coast, is heading the African Hunting Team, which this year will visit at least eight countries. "The pioneer junior companies are already in these countries. We are talking to them and meeting the governments and filling in our geological information box,” Bristow said.

The countries include Central African Republic, Sierra Leone, Liberia, Niger Mauritania, Democratic Republic of Congo, Mozambique and Kenya. “Some of these countries are showing potential to change,” Bristow said.