[miningmx.com] — RANDGOLD Resources’ share price is catching up on lost ground following the political settlement in Mali.
The West African gold producer has been punished heavily in the wake of that country’s military coup on March 21.
Over the Easter weekend, however, the military junta announced that it had agreed to reinstate the constitution, in terms of which the president of the national assembly will act as head of state and oversee the appointment of an interim prime minister to manage the country’s return to democratic rule.
As part of the settlement agreement, President Amadou Toumani Toure has formally resigned as head of state. The appointment of the interim prime minister will be by consensus and involve civil society and political parties. In return, Mali’s ECOWAS neighbours have lifted the sanctions they had imposed and committed to actively support the restoration of stability in Mali.
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.
The company’s LSE-listed shares were trading £65.95 on the day prior to the coup. It closed at £51.55 on Thursday, but gained 9.4% on Tuesday morning. It was trading at £56.40 by 10:30.
CEO Mark Bristow said on Monday that the events in Mali would not have an impact on the company’s production guidance for 2012.
“We have not completed our assessment of the impact this situation has had on costs,’ he said. “We will monitor the implementation of the political settlement by the relevant parties, and give the market a full update when we report our first quarter results on 3 May.’
