JOHANNESBURG (miningweekly.com) – Africa-focused miner Randgold Resources aims to exceed one-million ounces of consolidated gold production in 2014 and is closing in on its long-term goal of 1.2-million ounces by 2015, CEO Mark Bristow said in the company's 2013 yearly report on Friday.
The gold producer increased production by 15% to 910 374 oz at a reduced total cash cost of $715/oz in 2013 and Bristow said it was targeting a production increase of between 24% and 30% for the year, with costs coming down further to between $650/oz and $700/oz.
This growth in production was expected to come from rising grades at the company's flagship Loulo-Gounkoto complex, in Mali, improved throughput at the Tongon mine, in Côte d'Ivoire, and the first full-year contribution from the recently commissioned Kibali operation, in the Democratic Republic of Congo (DRC).
Bristow said the company's management teams had closely scrutinised all mining plans to ensure that they were both optimal and deliverable and that all operations would remain profitable, even at lower gold prices.
“In the current market, our focus needs to be on profitability and not on increasing reserves. The priority is to replenish profitable ounces because we are increasing production as we access higher-grade ores," he said.
“Our objective is also to extend our five-year rolling business plan to ten years and continue to look closely at all our projects against a range of gold-price scenarios. In the meantime, we have put in place a robust budget for 2014 and kept our five-year forecast intact.”
Bristow noted that, unlike most players in the gold mining industry, Randgold had not needed to write down its reserves and resources as the gold price dropped, as it had calculated its reserves at $1 000/oz and its resources at $1 500/oz for the past three years.
“A key feature of the ten-year plan is that the second half only requires sustaining capital. Kibali has a reserve-based plan that goes beyond ten years at around 600 000 oz/y.
“The Loulo-Gounkoto complex is currently scheduled to drop below 700 000 oz from 2020 but, with the potential for resource conversion from its Yalea and Gara operations, as well as from the high-grade underground project at Gounkoto, we believe the complex can deliver more than 600 000 oz/y for the next ten years,” he commented.
Given Randgold's traditional commitment to growing through discovery and development, it would continue to invest substantially in exploration and had earmarked $60-million for this purpose in 2014.
Randgold’s improved 2014 production target was further driven by an increase to the group’s total attributable mineral resources last year, despite depletion from mining in a year that delivered record production.
The company's yearly resource and reserve declaration, published on Friday as part of its yearly report for 2013, showed attributable resources up by 5% to 28.6-million ounces, while reserves, reflecting depletion, decreased by 8% to 15-million ounces.
Randgold reserve and resource management executive Rod Quick said the group's mines were ramping up both production and grade, which inevitably impacted on its reserve inventory.
“We are confident, however, that we can replenish our reserves through ongoing exploration as well as resource conversion. This confidence is based on the robustness of our current five-year plan as well as the prospectivity of the regions where we operate, as demonstrated by our growing resources,” he commented.
At Kibali – the giant gold mine Randgold was developing in the DRC – total reserves now stood at 11.6-million ounces at 4 g/t, up from 10.9-million ounces at 4.1 g/t, as a result of an updated mine design on a resource base, which grew to 22-million ounces.
At Loulo, reserves decreased to 5.3-million ounces owing to mining depletion, completion of the Yalea openpit and the redesign of the Gara underground mine to secure continued profitability by reducing capital development.
The neighbouring Gounkoto openpit mine also reported lower reserves as a result of mining depletion, lower grades owing to a change in the footwall modelling and the addition of some lower-grade footwall and hanging wall gains.
A drilling programme following up on the recently announced wide and high-grade intersections would test the validity of the new model.
Meanwhile, the latest results from the ongoing underground feasibility study at Gounkoto had confirmed a mineral resource of over one-million ounces at more than 6 g/t.
Current indications were that the optimal exploitation of the underground resource would be from a decline position, lower in the openpit.
Meanwhile, in Côte d'Ivoire, Tongon's resources and reserves were depleted by mining and ongoing infill grade-control drilling.
Deeper drilling had highlighted the potential for higher grades below the southern zone pit and further drilling was planned to test the depth extensions.
Based on current pay limits and that Tongon was scheduled to repay its capital next year, exploration was focused on near-mine low-grade resources which could extend the mine's life beyond the current seven years.