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Anglogold inconsistency rankles Bristow
David McKay
Posted: Fri, 22 Jul 2005
[miningmx.com] -- THE management of Morila, a gold mine jointly owned by Randgold Resources and AngloGold Ashanti, but operated by the latter, continues to trouble Mark Bristow. “There is no continuity. The management has changed again,” said Bristow, CEO of Randgold Resources.
Morila will produce improved figures in the June quarter, but Bristow’s comments indicate that the mine’s future long-term performance might always be volatile. “The cycle of attention to their [AngloGold Ashanti’s] assets is in broader wavelengths than ours,” said Bristow.
AngloGold Ashanti, which recently injected fresh blood into its operating team following the retirement of veteran miner, Dave Hodgson, declined to comment.
AngloGold Ashanti manages 22 mines across four continents. In contrast, the 500,000 oz/year Morila, is Randgold Resources’ only operating asset. The company is spending $89m
developing Loulo, another mine in Mali with proven reserves of 1.6m oz, but the company is to all intents a single asset entity.
Randgold Resources reported a $20m net profit in the 2004 financial year against a R47.5m profit in 2003.
Bristow has been critical of AngloGold Ashanti before offering to take over management of Morila. “We’re very happy to stand up and be counted,” he said in an interview with Miningmx earlier this week. “You’d think AngloGold would be happy with that too,” he said.
Bristow said, however, that Randgold’s decision to sell half of its 80% stake in Morila to AngloGold Ashanti in 2000 for $132m remained “a good one”. In fact, the sale proved to be a company maker for Randgold Resources which this year celebrated its tenth year of existence.
Commenting on future business, Bristow said the junior gold mining industry was “hot at the moment”.
“Juniors have not been that successful during the last 18 months,
but they have been tying up ground,” Bristow said. “The key challenge is to keep ahead of the juniors in the exploration game. We don’t want to get crowded out by permitting,” he said.
As a result, the company has added 2,500km2 of mining permits in the last three months and has applied for 9,000km2 additional land. The company has consolidated its position in Burkina Faso and remains interested in Ghana, a mature gold province.
Corporate activity remains elusive however. “My board asks me whether our hurdle rates (20% internal rate of return) are too high, but I don’t think so,” said Bristow. “So we’ve been doing deals lower down the food chain”. Randgold Resources has a joint venture with Barrick Exploration Africa in Tanzania and Adansi Asaasi Mining, a local Ghanaian firm.
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