[miningmx] — RANDGOLD Resources sees an opportunity to make hay from the woes
of distressed exploration juniors in West and Central Africa, saying the current
dynamics of the industry could produce some suitable targets.
Reporting second-quarter financials to end-June on Thursday, Randgold said its
exploration projects would continue to feed new prospects into the group’s project
pipeline to maintain the company’s growth profile.
Randgold targets between 825,000 oz and 865,000 oz of gold in 2012 from its West
African mines, up from 750,000 oz in 2011; a goal that CEO Mark Bristow said the
company was set to achieve. The group wants to be an annual producer of 1.2 million
ounces by 2015; a feat it is likely to reach once its Kibali joint venture with AngloGold
Ashanti in the Democratic Republic of Congo – due for commissioning in the fourth
quarter of 2013 – has ramped up in full.
The next project to take the group beyond the 1.2 million ounces mark is Massawa, in
eastern Senegal, which is currently progressing towards the final feasibility stage.
Elsewhere the group has various exploration projects in the DRC, Mali, Burkina Faso
and Ivory Coast.
“The thing about exploration is that it’s a numbers game,’ Bristow told
Miningmx. “We’ve stepped up our exploration work in the past two quarters
and it has thrown up quite a number of interesting things.’
Asked whether the company would consider acquiring the exploration assets of some
distressed juniors, Bristow replied in the affirmative.
“Some of the juniors are stressed and we’re looking at what they have,’ he said,
adding Randgold would consider any asset which has a resource base of at least three
million ounces.
According to a report by Reuters, Liberum analysts have cited Gryphon, which has a
development project in Burkina Faso, and Papillon in Mali as likely targets for the
company.
Many of Randgold’s existing mines were borne from the group’s own greenfield
exploration projects – an exception being Kibali, which it and AngloGold acquired as
an exploration project in a C$546m cash-and-share transaction for Moto Goldmines in
2009. The asset has an existing resource base of over 10 million ounces.
RECORD PRODUCTION, LOWER COSTS
Randgold Resources posted a 41% increase in interim profit to $245.9m, with the
second quarter contributing $141.9m, as its flagship Loulo-Gounkoto complex in Mali
reached a new high to push the company’s interim and quarterly production to
375,977 oz and 210,534 oz respectively.
“The most outstanding achievement of the quarter was that of the Loulo-Gounkoto
complex,’ Bristow said in commentary accompanying the results. “Despite the political
crisis in Mali during the quarter, the complex’s production reached a new high of
132,481 oz. Set to deliver 5000,000 ounces in 2012, the complex is now poised to
take its place as one of the largest gold producers in Africa.’
Cash costs for the quarter were $703/oz, down 6% from the previous period, with
Bristow saying the group would achieve its cost target of $650/oz for 2012.
Randgold’s LSE-listed shares closed up 1.62% on Thursday at £62.90, after trading as
high as £64.50 during the course of the day.
