LSE- and Nasdaq-listed Randgold Resources reports it is aiming at sub- stantially increasing its gold output from 440 000 oz/y to between 750 000 oz/y and 790 000 oz/y on a consolidated basis this year.

Company CEO Mark Bristow says that Randgold is currently ramping up production at its Gounkoto mine, in western Mali, which delivered its first ore in mid-June.

The recent discovery is located 20 km from the company’s flagship mine, Loulo, which is currently transitioning from being an openpit mine to being an underground mine. The Gounkoto mine is located on the southern portion of what was the larger Loulo permit and will add to Loulo’s growing production, as well as provide flexibility to the feed.

Owing to the size of Gounkoto, Randgold split the operation into two mining licences, namely the Southern Gounkoto licence and the Northern Loulo licence. The ore from Gounkoto will be toll-treated through the Loulo mine’s processing plant.

“Mining has started at Gounkoto and we are currently putting the finishing touches to the road and bridges, which will enable us to transport the ore through the rainy season, which starts this month,” says Bristow.

The company has completed the construction of flood berms, has redirected a river around the Gounkoto mining pit and is ready to roll out basic mining infrastructure. A large crushing and ore-handling terminal is scheduled for completion at Gounkoto in October. Meanwhile, the company has a preliminary crusher on site to deal with the soft ore currently being mined.

The Loulo expansion is taking place concurrently and will include the commissioning of a third large mill, which will increase Loulo’s capacity by about 10% to between 20 000 t/m and 30 000 t/m.

Randgold is also undertaking a scoping study aimed at evaluating treatment options for the low-grade ore resources, which are currently not included in the Loulo- Gounkoto life-of-mine (LoM) plan.

The company says it is 35 m away from reaching Loulo’s underground ore and Bristow believes that, within about two years, Loulo’s underground production will outperform the Gounkoto mine’s, owing to the expansion into the high-grade Yalea orebody.

At the same time, mining of the Gara pit at Loulo is progressing well. It has a further nine months to run as an openpit mine and, following this, will continue underground. Development of the Gara underground mine has already intersected the orebody and stoping will start between the end of the third quarter and early in the fourth quarter of this year.

“Completion of the combined Loulo-Gounkoto megamine complex is on track for year-end,” says Bristow.

Meanwhile, the Morila mine, which Bristow adds is a mature operation, is currently processing dumps as its LoM is only expected to last until 2013.

“We are currently investigating ways to extend the LoM through reprocessing the tailings dam and maybe undertaking a further pushback in the pit,” Bristow explains.

Tongon

The Tongon mine, in Côte d’Ivoire, was the only mine in that country to continue operations during the conflict between the now ousted President Laurent Gbagbo and current leader President Allasane Outtara, after Gbagbo refused to accept Outtara’s internationally recognised electoral win.

The mine is on track to commission the first phase of the hard rock crushing installation at the end of July, and the first blasting has been done in the pit, after the clearing of all explosive permits following the conflict.

The company is ramping up production and gold shipments are back to normal. “We remain on budget and we have sold the extra ounces that did not get sold last quarter,” says Bristow.

He adds that the process of finalising the power supply connection of the mine to the national grid is expected to start at the end of July and continue into August.

Kibali

Randgold has started relocating people from the first of 14 villages to the Kokiza resettlement village, at its Kibali joint venture gold project in the Democratic Republic of Congo (DRC).

“We have developed a citylike resettlement, where we have integrated 14 villages. It comprises 14 schools and some churches, including a Roman Catholic Church complex,” says Bristow.

The company, which owns a 45% share, is managing the development of the Kibali mine, which it owns in partnership with gold major AngloGold Ashanti, which holds 45%, and State-owned mining company Societe des Mines d’Or de Kilo-Moto, which owns 10%.

The Kibali project, located in the DRC’s north-eastern Orientale province, could potentially be one of the world’s largest gold mines and will rank as one of Africa’s largest gold mines.

The detailed design for the processing plant is in the final stages of completion and the company has finalised the project’s mining strategy.

“We are also currently preparing the tendering process for the underground and shaft development,” says Bristow.

He adds that the company expects to start terracing ahead of the construction start-up in the next quarter.

Bristow says that the mine has high-grade ore reserves, with ten-million ounces in mineral reserves and a large upside potential of a further nine-million ounces of resources. “We guided the market on the upside potential of Kibali and it is our intention to start demonstrating why the company believes this additional potential is real,” he notes.

He believes that Kibali’s exciting prospects are enhanced by the relatively simple metallurgy required for the mineral extraction, and, while there are infrastructure challenges, the company has already built hundreds of kilometres of road and has linked the Doko region of the DRC to Uganda.

It also plans to supply the mine with a phased hydropower development, the first stage of which will be the Nzoro 2 station. This initiative will ensure the supply of low-cost power to Kibali, which should positively impact on the profitability of the operation.

“When we bought Kibali, no one was interested in the DRC, but what we have seen – and expected to see – is the enormous upside potential. A lot of money is expected to flow into the region when the mine is commissioned, which is scheduled to start end-2013,” Bristow says.

Meanwhile, Bristow is back at work, following a motorcycle accident, in Senegal, in May this year.

“The company continued to run smoothly in my absence, thanks to a great team,” says Bristow.

He adds that he believes the next generation of managers at the company are highly competent and will be able to run Randgold Resources in the future, given that most have already had the experience of three discovery-to-commissioning mine developments, with Kibali being the fourth.

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