[miningmx.com] — RANDGOLD Resources’ Tongon mine in Cote d’Ivoire is delivering a “close to normal’ operating performance, despite the problems in the country, according to CEO Mark Bristow.
Bristow told Miningmx: “Our day to day business conditions have not changed. We are still both mining and exploring at Tongon.
“There are no restrictions on our movements and we don’t need to have armed guards for protection. Our supply chain coming in from the north via Dakar is working well.
“We would face some challenges if the impasse in the country was to last until about June but all the latest indications are it will be settled fairly soon.”
Tongon is situated in the far north of Cote d’Ivoire, well removed from the “war zone” in the south, unlike Newcrest Mining’s Bonikro operation.
Newcrest announced on Thursday that it had suspended operations at Bonikro and evacuated its expatriate employees to Ghana.
“We have always worked closely with the northern authorities in Cote d’Ivoire and the officials we deal with on a day to day basis have not changed,” said Bristow.
“Randgold have had no interference from either side in this conflict which I believe results from our strategy of being completely aligned to the requirements of the country’s economy and contributing to those requirements. That’s your best defense in these situations.”
Bristow conceded the recent sharp drop in the company’s share price showed investors were not convinced about this and had focussed overwhelmingly on the negative aspects of the group’s exposure to Cote d’Ivoire.
The Randgold share price dropped some 30% from around ₤65 in October to as low as ₤45 before recovering marginally to current levels around ₤47.
Bristow commented: “We are delivering on our contract with the market which is to manage the challenging environments in which we operate as well as continue to deliver on the growth projects such as Loulo/Gounkoto and Kibali.
“But I don’t think the market is going to accept this until we publish our next quarterly results which are due out in the first week of May. Then the numbers will speak for themselves.”
In his review in Randgold’s 2010 annual report published on Thursday, Bristow predicted group gold production would rise 70% during 2011 to between 750,000oz and 790,000oz.
He said Tongon should contribute between 260,000oz and 270,000oz of this “provided the political situation in Cote d’Ivoire does not impact on the mine much longer”.
Bristow added management was targeting 2011 total cash costs per ounce, after royalties and taxes, of less than $600/oz “subject to exchange rates and input costs remaining in line with levels seen at the start of the year”.
He pointed out Randgold had increased its attributable proven and probable mineral reserves to 16.39 million ounces (m oz) at end-December from 15.56m oz a year previously.
“We have not been tempted to use the increased price of gold to boost our ounces. They have been calculated at a relatively conservative $800/oz gold price while still taking cognizance of higher input costs.
“Excluding Morila, which is now only processing stockpiles and Massawa which is still at feasibility study stage, the average grade of our reserves remained about 4g/t with Loulo, Gounkoto and Kibali all comfortably above that mark.
“This is real growth, framed within realistic parameters and based on viable business plans,’ Bristow said.