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‘Hot spot’ Ivory Coast may host next new Randgold mine

Mark Bristow on charity ride through Africa

Randgold Resources CEO Dr Mark Bristow tells Mining Weekly Online’s Martin Creamer that highly prospective Ivory Coast has the best mining code. Camerawork: Nicholas Boyd and Duane Daws. Editing: Nicholas Boyd and Lionel da Silva.

Mark Bristow on charity ride through Africa

3rd July 2014

By: Martin Creamer

Creamer Media Editor

  

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JOHANNESBURG (miningweekly.com) – Under-explored Ivory Coast, which has just introduced what is seen as the most investor-friendly mining code in Africa, may become the site of the sixth mine that the London- and Nasdaq-listed Randgold Resources will build on the continent.

Randgold Resources CEO Dr Mark Bristow described the Ivory Coast as “the hotspot for us right now”.

The expounder of discovery and development told Mining Weekly Online in the attached video interview that the company needed another mine and was  “very excited” about the Ivory Coast and the way it was emerging.

“We’ve just seen the Ivory Coast work with the mining industry to deliver a very strong, constructive and attractive mining code - the best in Africa.

“It’s got very good infrastructure and a very professional bureaucracy. You can work in that country from one political regime to the next, and geologically it’s completely under explored,” Bristow commented to Mining Weekly Online.

Randgold, which has built five gold mines in Africa in the last 19 years, is now searching for a gold deposit that has a minimum of five-million ounces gold on which it can build a new mine that will provide a return on investment of 20% at a gold price of $1 000/oz.

Bristow left Johannesburg on Thursday for Senegal, where consideration will be given to projects, including the Massawa project in Senegal, brownfield and new targets in Mali and possibilities in the Democratic Republic of Congo (DRC), at the company’s yearly exploration review.

Randgold’s two “particularly attractive” permits in Ivory Coast are Mankono prospect and Fapoha, which is south of Randgold’s existing Tongon mine, already the country’s biggest gold producer.

African governments, like the Ivory Coast government, were normalising post-boom and appreciating that capital was “scarce and scared”, said Bristow, who has just completed another 10 000 km across Africa on a motorbike. In 2009 he rode from Cape-to-Cairo and in 2012 covered the Mauritania and Western Sahara stretch, making him one of the few people to circumnavigate the continent on a motorbike.

His latest Boyz on Bikes charity ride took off from Ivory Coast’s Abidjan and arrived at South Africa’s Cape Point 26 days later, collecting $1.6-million from sponsors and supporters, which has been distributed to 15 orphanages and schools in Ivory Coast, Ghana, Benin-Togo, Nigeria, Cameroon-Gabon, Republic of Congo, DRC and Angola.

“We rode through those countries and worked with the locals. We didn’t pay any bribes,” he added to Mining Weekly Online.

He sees sub-Saharan Africa as an awakening emerging market and Africa as offering some huge world-class opportunities.

Since launching in 1995, Randgold, under Bristow’s leadership, has built the Morila, Loulo and Gounkoto mines in Mali, Tongon in Ivory Coast and Kibali in the DRC.

It has succeeded by focusing on developing opportunities that can cope with the risks and the costs of doing business in Africa as well as ensure that all the stakeholders associated with those investments can also benefit.

“Africa is a very expensive place to operate. It’s got no infrastructure. It’s got very low capacity.

“To be able to invest in Africa and really develop something where the nation benefits from the national asset, you’ve got to have a sizeable deposit and project. Many develop marginal assets, which don’t work.

“As miners, we sometimes forget that we’re not the owners of the mining rights. We’re renters of national assets and we need to bring them to account for the benefit of the government as custodians of those assets for the people of the country, as well as the communities around the mines being developed,” he said.

Based on last year’s numbers, Randgold’s operations in Mali represent more than 12% of the gross domestic product of Mali, with nearly one in ten Malians touched by Randgold’s efforts in the country, where it is poised to produce more than 800 000 oz of gold this year.

It is targeting an output of 550 000 oz in the DRC, where the new Kibali mine is making a positive contribution in the north-eastern part of the country, which was an economic desert prior to the company’s arrival.

Born in Johannesburg out of the old Rand Mines stable, the company employs close on 15 000 people across Africa, where it has a tradition of developing local management.

“We don’t want our management to be expatriate. For instance, in Mali we have only one expatriate in the three mines’ management team,” Bristow told Mining Weekly Online. Already at Kibali, more that half of the executive team is from the DRC. 

The other part of the recipe is the relationship with local business people. “We will not employ international service providers. If we can’t find the appropriate skill in the country, we will then marry a local person to an international skill but give the contract to the local business.

“We really focus on developing that local business so that you can manage crises like the coup d’etat in Mali, the crisis in Ivory Coast and the ongoing challenges in the DRC. We can manage that because we have predominantly national partners,” he said.

Randgold has paid dividends for the last seven years and is forecasting ongoing dividend growth, reminiscent of South Africa’s gold-mining companies of yesteryear, which were everything a gold investment offered, plus big dividend payers, because of their high profitability.

Randgold has created value through its discovery and development philosophy and remained committed to giving back to its shareholders as well as continuing to grow.

The concept of its ten-year plan is to show that it can deliver strong cash flow with limited capital.

The company’s way of demonstrating is to generate free cash flow from projects, which show a return on capital after paying it back.

Production of between one- and two-million ounces a year is the target of the company, which is intent on offering shareholders the leverage and the protection and security that gold investment gives against other investments, as well as a dividend yield, the best of both investment worlds.

Edited by Creamer Media Reporter

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