On the hunt for assets
Randgold Resources CEO Mark Bristow says the lack of investment in exploration by other gold miners, together with global geopolitical and economic uncertainty, should be good for the gold price in the long run.
That would benefit miners like Randgold, which is continuing to spend money on finding substantial new deposits. It expects to spend about US$60m on corporate costs and exploration projects this year but Bristow says it would be prepared to spend more if it found a superlative target.
Randgold’s requirement for a new development is that it must offer least 3m mineable ounces of gold that can be extracted at a cost of $1,000/oz or less and deliver an internal rate of return of at least 20%.
Bristow says the group has at least three advanced targets that could potentially be important assets, apart from the work it is doing in close proximity to its existing mines.
New areas include Fonondara and Kassere in northern Côte d’Ivoire and Sofia in Senegal.
At Kassere, drilling has intersected some high grades and the target has been extended to 1.2 km, while at Fonondara additional drilling suggests the broader system could extend from 1.5 km to 15 km to the north. Sofia would add to the viability of the Massawa project, 10 km to the east, which is at feasibility study stage. Massawa contains a large proportion of refractory ore, which is costly to treat, but studies at Sofia show it contains nonrefractory ore, which makes a combined Massawa-Sofia complex more economically viable.
A higher gold price helped Randgold Resources’ profits in the six months to June after technical problems at its Tongon mine in Côte d’Ivoire and Kibali mine (a joint venture with AngloGold Ashanti) in the Democratic Republic of Congo.
The problems were partly offset by higher output from the Loulo-Gounkoto complex in Mali.
Group sales fell to 571,904 oz from 582,045 oz but an average gold price of $1,224/oz was realised compared with