TORONTO (miningweekly.com) – Randgold Resources said on Monday its Kibali joint venture with AngloGold Ashanti in the Democratic Republic of Congo (DRC) will produce 600 000 oz/y from 2014, but stopped short of providing a new capital cost estimate for the mine.
Randgold’s board in January approved the project development plan for the project – bigger than the production rate of 484 000 oz/y of gold for the first five years, dropping to 325 000 oz by year eight, that a 2009 feasibility study foresaw – and the plan will go before AngloGold’s board “at the earliest opportunity”, the London-based company said.
Randgold CEO Mark Bristow said the plan for the bigger six-million-ton-a-year mine would see the joint venture partners (each company owns 45% with the government holding the remaining 10%) access the ore through an openpit, as well as decline shafts and a vertical shaft.
The companies had also committed to spend $80-million on early work at the project, located in north-east DRC, and had only two major contracts left to finalise.
The previous capital estimate for the smaller Kibali project was $1.4-billion, now likely to be higher, but Bristow would not be drawn on the new number, saying this still needed to be decided with AngloGold.
Bristow said the relocation of some 17 000 people to make way for the mine was progressing smoothly – Randgold was building the villagers new houses at a rate of 300 a month – and was on track for completion by the middle of 2013.
Randgold and AngloGold bought the project in 2009 with their joint purchase of Moto Goldmines.
Speaking on a conference call after announcing a 323% increase in fourth-quarter profit to $136.2-million, higher than any full-year profit the company made before, Bristow also sounded a positive note on the DRC itself.
“I know some of my shareholders are a bit apprehensive when you mention the word DRC, but it’s just a fantastically prospective country,” he said.
“It’s got a government that understands the need to attract capital.”
While the country has been attracting a lot of interest from the mining industry, with companies such as AngloGold and Brazil’s Vale being active in it, some of the attention has been negative.
Take, for example, Vancouver-based First Quantum’s having taken the government to international arbitration, accusing it of illegally seizing its mines. But even that case was resolved early this year after the parties involved agreed to a settlement.
“We’re very encouraged by the initiatives and the significance the Congo and its regional governments place on foreign investment,” commented Bristow.
Randgold, which aims to grow production from 2011’s 696 023 oz to 1.2-million ounces by 2014, owns mines in Senegal, Mali and Côte d’Ivoire.
Shares in the company climbed 2.3% on the LSE to close at £75.65 apiece.