JOHANNESBURG (miningweekly.com) – The builder of five gold mines in Africa, who is currently exploring for a sixth, has a simple message for US President Barack Obama, who this week hosted the US-Africa Leaders Summit with the objective of turning Africa into a viable emerging market.

“If you want to lift Africa into an emerging market category, you’ve got to fund capacity and capacity means the need in government to understand why you need business and capacity in business, so that people become wealthy so they reinvest. Alongside those two key components you need infrastructural investment,” Randgold Resources CEO Dr Mark Bristow commented to Mining Weekly Online in an interview following the release by the Africa-focused London-listed company of its second-quarter (Q2) results, which saw it produce 227 283 oz of gold in the three months to June 30 - 2% fewer than during the first quarter.

A production stutter at Randgold’s newest Kibali mine in the Democratic Republic of Congo (DRC) and recovery issues at the Tongon operation in Côte d’Ivoire are hiccoughs that hid three consecutive quarters of record performance at the company’s flagship Loulo-Gounkoto, in Mali, which put overall Q2 production 41% higher than the corresponding quarter last year.

Loulo-Gounkoto’s performance has set Randgold up to achieve its minimum 1.1-million-ounce guidance for the year, which is also likely to see the Q2-faltering Kibali hit its 550 000 oz target as well.

At the same time, the developing Kibali mine in the DRC remained on track to reach its forecast target despite commissioning disruptions.

The decrease was mainly due to a drop in recoveries and throughput while the plant was processing tricky transitional ore during the commissioning of the sulphide flotation and concentrate treatment circuit.

Development of the underground mine saw the orebody been intersected as planned and stoping is scheduled to deliver additional ore to the mill in the fourth quarter of this year.

Hydropower plants that the company is building to power its DRC mine have begun generating power at a low $0.10/kWh. Capital payback is 20 months as a trade-off against diesel.

Randgold is continuing to invest in its sustainability programmes, driven by its core belief that its host communities should benefit from its presence. 


Investec analysts report that Randgold remains the go-to gold stock in London, but is fully valued under their base case assumptions of $1 300/oz gold and trading at a 28% premium to their calculation of net present value.

Cost an ounce rose by 2% to $701/oz on the previous quarter but was 12% down on Q2 in 2013.

Profit from mining of $162.3-million decreased by 5% from the previous quarter but was up 54% on the corresponding quarter in 2013.

Loulo-Gounkoto’s 174 052 oz was up 3% on Q1. Another significant development saw the paste backfill plant at the Yalea underground mine being commissioned, enabling miners to harvest a nigh 100% of the high-grade zones.

The complex’s energy cost reduction programme continued to evolve with the installation of two more medium speed generators, due for commissioning in the second half of the year, capable of running on less expensive heavy fuel oil. 


The fledgling Kibali operation produced 91 137 oz of gold against the previous quarter’s 112 549 oz from its opencast mine.

In the underground mine being developed, stoping is scheduled to deliver additional ore to the mill in the fourth quarter of this year.

Production at Tongon, in Côte d’Ivoire, continued to be impacted by equipment issues in its crushing circuit, but supplier Sandvik is currently replacing the underperforming vibrocone crushers with conventional hydrocone crushers, and the mine’s performance is expected to improve steadily through the second half of the year, with the plant operating at or near its design throughput capacity by year end.

The Morila retreatment operation in Mali also recorded lower production and higher cost numbers as it adjusted to the pit pushback project.

On the exploration front, ongoing drilling has confirmed the potential for orebody extensions at Loulo and Gounkoto, and the feasibility studies on a Gounkoto underground mine and the Gorumbwa openpit continue to progress.

“Exploration remains the engine that drives our business and even while we’re bedding down Kibali, we’re already hunting for our next big discovery across our extensive and expanding permit portfolio.

“This quarter’s results have again demonstrated the value of a well-balanced asset inventory, with Loulo-Gounkoto stepping up to the plate while Kibali is still a work in progress and Tongon works through its technical challenges,” Bristow added.


Conceived 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.

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 expenditure.