[miningmx.com] — SHARES in Randgold Resources were trading down
15% on the London Stock Exchange on Thursday following reports from Mali that
elements of the country’s military have mounted a coup attempt.
Randgold derives around 60% of its gold production from Mali, having invested over
$1bn in recent years. The company’s relationship with the country dates back to 1996
when it acquired BHP Mali. Assets like Syama, Morila and Loulo – all in Mali – have
since formed the foundation of Randgold’s rise as a foremost African gold producer.
News of the coup comes a day after Randgold and the Malian Minister of Mines,
Amadou Cisse, signed a convention for the company’s new Gounkoto mine. The mine
carries a 5.5 million ounce deposit and has been in production since June last year. As
in the case of Loulo, the state holds a 20% interest – with Randgold accounting for
the rest.
The potential of an additional 2 million ounces in Gounkoto’s reserve has previously
been earmarked as a future driver of Randgold’s share price.
In a statement released on Thursday, Randgold said it was keeping a close watch on
developments. CEO Mark Bristow, who was at the company’s Loulo complex some 350
km from the capital Bamako in the west of the country, said the current state of
affairs was calm, although exact details were unclear.
He said Randgold was in touch with its sources within the country and would make a
statement once it had obtained more clarity on the situation. In the meantime, he
said, operations at Loulo, Gounkoto as well as Morila were running normally.
“Malians respect laws and I don’t believe this will come with a high-handed change in
political direction,’ Bristow said. “We don’t expect any subsequent governments to
disregard proper and due process.’
Randgold’s shares were trading at £56.05 shortly before noon, down 15% from
Wednesday’s closing price of £65.95.
Reuters reported on Thursday that renegade soldiers have gone on state television to
declare they had seized power in a coup after the government’s failure to quell a
nomad-led rebellion in the north.
Soldiers of the newly formed National Committee for the Restoration of Democracy
and State (CNRDR) read out a brief statement, which said they decided to put an end
to the incompetent regime of the incumbent leader Amadou Toumani Toure.
“We promise to hand power back to a democratically elected president as soon as the
country is reunified and its integrity is no longer threatened,’ a spokesman was
quoted.
Toure was in any case due to step down after elections scheduled for late next
month.
INTERNAL STRIFE
It is the second time in as many years that Randgold’s shares have been knocked due
to internal strife in regions where the company operates.
The company lost around 25% in value between November 2010 and March 2011 –
from levels around £60.00 to £45.00 per share – due to the short-lived civil war in
Ivory Coast over disputed elections. Randgold was again trading above £60.00 by
August 2011.
