[miningmx.com] — RANDGOLD Resources will invest a billion dollars over
the next two years in building the Kibali mine in the Democratic Republic of Congo
(DRC) and the further development of the underground operations at the Loulo
complex in Mali.
Interviewed at the Mining Indaba conference in Cape Town on Monday, Randgold
CEO Mark Bristow said this would be funded out of retained cash
and would not affect Randgold’s stated policy of growing its dividend.
Randgold more than trebled attributable profit to $377m (2010 financial year –
$103.5m) for the year to end-December and doubled its annual dividend to $0.40 a
share, despite 2011 being “the most difficult year of my career by far,’ according to
Bristow.
In 2011 Bristow was involved in a serious motorcycle accident in Senegal. He
required emergency evacuation to South Africa and he spent more than a month
recuperating.
The newly opened Tongon mine in Cote d’Ivoire also had to cope with the impact of
that country’s civil war early in the year, and a number of operating problems
towards the end of 2011.
Bristow pointed out that if the gold price stays above $1,600 for the rest of 2012,
Randgold would have built up $450m in retained cash by the end of the year.
This meant the group would be able to meet all its funding commitments out to 2015
to reach its targeted annual production level of 1.2 million oz of gold, even if the gold
price were to drop back to $900/oz.
Randgold increased total production 58% to 696,023 oz in 2011 and is targeting
production of between 825,000 oz and 865,000 oz for 2012.
Bristow said management was targeting total cash costs – after royalties – of less
than $650/oz for 2012 mainly due to a significant, estimated increase in Loulo’s
production contribution.
“Continued growth in production over the following five years is forecast from
increasing grades out of the Loulo/Gounkoto complex, and with Kibali adding to
production in 2014,’ Bristow said.
“On the back of this forecast increase in grade, the group total cash costs based on
current prevailing input cost parameters, are forecast to reduce towards the $500/oz
to $550/oz range over the same period.
“People seem surprised by the upside potential at Randgold Resources but they
should not be.
“The difference between us and the rest of the gold sector is that we are growing
production by mining into higher grade deposits, and we are not issuing any equity.
“When you do that, combined with a high gold price, then you create real value.’
