Bristow describes Randgold sell-off as ‘pathetic’ and ‘panicky’

Mark Bristow, CEO, Randgold Resources Pic: Martin Rhodes

RANDGOLD Resources CEO, Mark Bristow, does not mince his words and his reaction to the 7.5% drop in the Randgold share price on Monday, the day the group announced a doubling of its annual dividend to $2 a share, is unprintable.

The expurgated version is that Bristow describes the market reaction as “pathetic” and “disappointing”. He attributed the plunge to shareholders on the London and New York stock exchanges panicking over the bad news coming out of the Democratic Republic of Congo on the new mining code.

Bristow in his results presentation on Monday had told investors that the debate on the mining code “was not over yet”, and had pointed out the impact on Randgold’s Kibali mine was “relatively benign as we stand today”. The main mines at risk from the new code are the Katanga copper producers.

Said Bristow: “One of the big embedded changes is an increase in royalty to 4.5% which Kibali is already paying under duress. The state already owns 10% of Kibali which is what is proposed; they have not changed the tax rate of 30%; they have introduced a windfall tax but if you look at the year we made the decision to invest in Kibali the gold price was about $1,600/oz average so that would not trigger any excess taxes for Kibali.”

On the positive side Bristow pointed out this was one of the rare opportunities for investors to get into Randgold stock.

He commented: “People are always complaining that this is an expensive stock. I have always told them that if you follow us carefully – and you want to be a shareholder – you can get in at a reasonable time because, given the vagaries of Africa, there’s always some bad piece of news that will affect our stock price over time.

“The key here is that you have to be clear in your head – have we done anything that materially impacts on the value of our company? The answer is no.”


Scrapping with politicians and regulators in the DRC has not been Bristow’s only travail over the past few months. In November last year he underwent full open heart surgery to replace an aortic valve.

Bristow is now 59 and the obvious question after major surgery like that is whether it has affected his appetite to keep running Randgold with the commitment he was shown since starting the company more than 20 years ago.

He said he was still as fit and active as ever and had no intention of stepping down anytime soon, but noted he had addressed the issue of his succession. “I have not set a deadline, but I have accepted the principle of departing. I do not want to be the CEO at 65, and I do not want to be chairman.

“We have a succession plan well underway. Three years ago the succession risk was identified and we set out to plan for it. The first stage was to deepen our organisation and ensure we had succession visible down to the second level in the operational heads of department,” he said.

That was followed by an anonymous, in-house peer assessment process which has identified five executives who could run the organisation in future. Bristow said he had written to each of those executives individually.

Further developments – such as follow-up interviews and more training if required to rectify identified potential weaknesses – are being looked after by the Randgold chairman and senior independent director.


  1. Once there was a CEO who was reasonably good at his job but exceptionally lucky… His shareholders loved him… Then he saw how much they loved him and how powerful he was beacause he stuffed their pockets with good, hard cash and he thought to himself, damn, I am good, in fact I think I am brilliant… So he became arrogant, started badmouthing his peers who were not as lucky as he… and eventually he started calling his shareholders names that cannot be printed in the media… The end…

    • Full marks Goldminer ,

      He has become petulant , including in dealing with his host government & communities.

      His Co. is grossly over-valued at $8,5Bn , given that its ex-growth BY HIS OWN ADMISSION ( projecting ±1,35Moz/yr foreseeable ). Randgold generates OCF= $540M , with FY18e Capex = ±$220M. At these Gold prices, thats FCF = ± $300M. Even if it where to declare all FCF as div , it will still be yield= 4%. Compared to RIO = ±9%.

      As for his luck, The fact is that all his exploration targets/projects were acquired as part of BHP Mali Tranactions. Furthermore, he let Fekola go due to NOT so insightful geological analysis by his team. Today, Fekola is a runaway success in B2Gold hands. It is only Kibali which was acquired via M&A, after much trepidation, with AGA’s money. Sure, Randgold contributed some $1250M Capex to the venture, which is a lot of bucks!

      With Cash = >$500M, and NO DEBT, sure Randgold can built another 250koz/yr mine BUT its getting tougher & Massawa will NOT be another Loulo-Gounkoto!

  2. Price discovery based on fundamental valuation is long gone.

    Now, we have investors on the one hand, who wish to use fundamentals to receive a return on a sound investment and the “market makers” on the other hand, who regardless of fundamentals, wish to turn a profit on a trade.

    So we are to believe that investors made a rational decision to sell the stock on the day that the company announced a doubling of the dividend? If the fundamentals were so glaringly poor, then the share price should surely have declined gradually over time to be in line with them. Mark Bristow’s exasperation is justified in just this one statement – “The key here is that you have to be clear in your head – have we done anything that materially impacts on the value of our company? The answer is no.”

    On the other hand, the “market makers”, with their primary role as liquidity providers, thus enabling “true” price discovery, are certainly helping to discover a price to someones advantage. Bearing in mind that they can be on both the buy and the sell side of a trade in various multiples.

    Daily trade volumes in the mining shares are very small relative to their actual total sizes and it does not take too much in terms of volume to move the price. The SA mining shares look like extreme rollercoaster rails when viewed over several months or even years. Does this mean their businesses are changing that rapidly? Yes the political landscape is forever changing however does this explain changes of 50% in certain mining stocks in periods of less than 3 months?

    I think it would be most informative to be given some insight into the entities behind the larger trading volumes on the SA mining stocks…

  3. So gold speculator, if you do well, you’re lucky. If you fail it’s either a case of we’ve told you so or complete silence in case it was backed by inter alia you? Still have not seen your analysis / response on the latest Sibanye releases, you have gone strangely quiet?

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