Mark Bristow, CEO, Randgold Resources
Send this article to a friend
Print this page

» Randgold to expand Ivory Coast project
» Mali jewellery project a success - Mark Bristow, CEO, Randgold Resources
» Randgold to capitalise on gold high
» Randgold pays maiden dividend


Randgold chasing the fat chicken
David McKay
Posted: Wed, 18 Jul 2007

[miningmx.com] -- MEETING IN A WOOD-PANELLED room filled with early autumn sunshine Mark Bristow acknowledges he almost brought the curtain down on his Randgold Resources career. “I think we’ve all been through a period of introspection,” he says of a company he helped found in 2005. “I get a lot of opportunities thrown my way. But I’ve decided to stay.”

That must come as a major relief to shareholders: Bristow is synonymous with the company’s progress, particularly its ability to make a virtue out of its near-metronomic quarterly performances (costs down, gold production up). But it wasn’t always so…

The company’s early years were far from settled and may have ended in disaster as a gold price of $255/oz nearly tipped Bristow’s Randgold over the edge. Bristow had to sell a 40% stake in the company’s beloved first gold mining project – Morila, in West Africa’s Mali – to AngloGold Ashanti to properly finance it. Although the sale proved a company-saver you sense Bristow would have preferred to have the whole mine.

He then (in 2004) tilted at Ashanti Goldfields in a failed $1.7bn all-paper bid.

Meanwhile, the gold price was stirring in a price resurgence that helped settle Randgold into a pattern of steady organic growth. Cash flow from the gold market has enabled Bristow to steer away from other corporate activity and to dig Loulo, also in Mali.
I’ve decided to stay
Today, having worked through his options, Bristow is now faced with kicking on again. What’s planned now for Randgold Resources is more of the same – plus a fresh dabble in corporate activity as its long-term production profile declines.

“Production grows until about 2011. After that we need Tongon (a mine Randgold is developing in Cote d’Ivoire), or something else needs to be in,” Bristow says.

Analysts have confidence in the plan. “We see the group developing into a substantial gold producer over the longer term and continue to rate the stock overweight,” says Steve Shepherd, an analyst at JPMorgan.

Alex Gorbansky, MD of US-based Frontier Strategy Group, says: “Randgold is a unique case of early stage exploration to production. They recognised Mali could be stable early on and in the early stages they managed the social changes.”

But that “something else” of which Bristow speaks could be retrieved from the open market. Bristow perceives the North American majors to be cautious of African investment after Bulyanhulu, a mine developed by Barrick Gold, Bristow says was a disappointment.

After a period of corporate activity – in which majors have merged and then turned on the mid-caps, at ever-increasing premium – the view has been that Randgold could help consolidate the junior mining sector. Bristow says he’s not interested in that. “People want me to mop up [the junior mining companies in Africa] but that’s not my business. I want the same big, fat chicken as everyone else.”
I want the same big, fat chicken as everyone else
Bristow won’t speak openly of targets or timing, but significant market support will be required. What’s planned is a paper deal that could transform the company. “The big guys aren’t rushing into Africa to take on new mines. But we’re able to do it. We’re still small and nimble and have equity.”

There’s been speculation that Randgold has been in discussions with Toronto-listed Banro Corp, which owns properties on the Twangiza-Namoya belt in eastern Democratic Republic Congo (DRC). But Bristow – who has travelled to most African countries and has explored properties during civil wars – isn’t currently interested in the DRC.

Click Here to subscribe to our daily newsletter
“We’ve spent an enormous time in the DRC. We know it backwards. We just feel that we need to continue building relationships. If you just listen to what’s coming out of the DRC it’s not clear what’s going to happen.”

Underpinning those efforts is a simmering, unpredictable gold market, though perhaps not so unpredictable. “All the gold companies say they’re growing yet annual gold production falls,” Bristow says. The fact of the matter is that good gold mines are hard to find. Entrepreneurs bring the old bad ones back. But “once a dog, always a dog,” says Bristow.

Randgold’s market capitalisation has gained 49% this year (to May), even though the gold price is 30% stronger. Behind it all Bristow is the ringmaster: either in New York mixing with the suits that buy his company’s shares or in Bamako, the cacophonous capital of Mali through which the 2,500 mile Niger River plots part of its way.

Allowing for moments of vainglory Bristow has many winning features, including a prodigious energy. And his one-eyed interest in the affairs of Randgold – which must surely warm his shareholders’ hearts.

However, chief financial officer Roger Williams has had enough and has resigned from the board to spend time at home.

“It’s tough on families so you make your decisions,” says Bristow of his life, where home can be as much a sojourn as a hotel room in Boston. We wind up the interview. “Best to get it done now,” says his PA of the interview. “We don’t know when he’ll next be in Johannesburg."