JOHANNESBURG (miningweekly.com) – London- and Nasdaq-listed Randgold Resources' strategy of discovery and development has resulted in the company finding its gold at a cost of $10/oz and then being able to sell it off at $1 000/oz, Randgold Resources CEO Dr Mark Bristow told Mining Weekly Online on Tuesday.

Bristow said that it was the company's success at discovering and developing that had placed it in a financial position to be able to be aggressive when acquisition opportunities did arise, as evidenced with its acquisition of Kibali – formerly Moto – in the Democratic Republic of Congo (DRC), at a higher cost an ounce.

"We bought Kibali at $35/oz, but the rest of the projects are coming in at well under $10/oz. It's good business when you find the ounces for $10/oz and you sell the gold for $1 000/oz," South African-born Bristow added.

Randgold, which is developing four new gold mines in Africa, is on track to produce at a rate of 1,2-million attributable ounces of gold a year from 2014, up from 600 000 oz attributable ounces from 2011.

"That 1,2-million ounces does not take Kibali into account," Bristow was quick to point out to Mining Weekly Online.

Of the four new gold mines being developed – Tongon, Massawa, Kibali and the new Gounkoto – Bristow said: "Each has a deposit well north of three-million ounces of gold and we don't have to beg, borrow or steal any money to fund these projects. We are funded, even at a $700/oz gold price."

The company has $620-million of cash in the bank, it is making "real money" at the current gold prices.

"Not only do we have the project pipeline defined, and not only have each one of the projects already passed our initial economic test, but each project is in a jurisdiction that we understand and each project has geology that we have real confidence in," said Bristow.

Randgold's Tongon discovery in Côte d'Ivoire is due to start producing gold in October 2010 and the prefeasibility study for the exciting new 6g/t-plus Gounkoto in Mali is expected to be completed in March 2010, with the full feasibility stacking up by year-end.

Randgold, which is due to begin constructing Gounkoto in the first quarter of 2011, will complete the new mine in 20 months to 24 months, with operation expected by the beginning of 2013.

The Massawa gold project in Senegal would take a little longer, with construction beginning in the third quarter of 2013. Massawa, a multiple orebody, is geologically and metallurgically complex, somewhat the same as Loulo, with seven kilometres of mineralisation, unlike Gounkoto is much more compact and high grade.

Construction of Kibali in the DRC should begin in 20 months, and take from 20 months to 30 months to build, because of the need to establish infrastructure and the obligation to resettle local communities.

On the Moto deal with AngloGold Ashanti, Bristow said: "We have always said that we will take something on if it is going to create value and if it offers a strategic-paradigm-shifting opportunity, and certainly Moto did both for Randgold, but it doesn't signal a detraction from our core strategy of discovery and development.

"The strategy of discovery and development has built our business and given us the ability to be a little more aggressive when exciting opportunities like Kibali arise.

"We are very mindful of the risk in the DRC and that's why it is great to have AngloGold Ashanti along for the ride. We have worked together through some difficult times, which is always a good way to build a relationship," he added.

He said Randgold is still in the build-up phase at Loulo in Mali, where unit costs would decline as tonnage increased.

"We're in a transition at Loulo. We don't want to cut it fine on the opencast because we want to keep the flexibility, but at the same time, we're going full out on the underground and the ramp-up. We cautioned the market that we would be in a higher cost regime, but that cost profile is due to change as volumes build up," he said.

The pioneering Morila operation in Mali, which has had a stellar quarter, will make less of an impact on the Randgold income statement from the fourth quarter of 2010, as Tongon begins to dominate.

This year alone, Morila has paid $130-million to its shareholders in dividends and $52-million to Randgold itself, which more than covers capital.

Bristow said in January that gold would hit $1 200/oz before the year-end "and I'm sticking by that prediction", he told Mining Weekly Online.