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Randgold’s Loulo-Gounkoto complex delivers robust Q1 results

13th May 2016

By: David Oliveira

Creamer Media Staff Writer

  

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London- and Nasdaq-listed gold miner Randgold Resources announced earlier this month that its flagship operation, the Loulo-Gounkoto complex, in Mali, delivered a robust performance in the first quarter ending March.

This is attributable to the commissioning and resolving of tech- nical issues at its Kibali mine, in the Democratic Republic of Congo, and its Côte d’Ivoire-based Tongon mine.

The company noted that the performance of the Loulo-Gounkoto complex had enabled it to post a profit increase for Q1 in 2016, compared with Q1 and Q4 in 2015.

The group also posted a significant improvement in safety, with three out of five operations reporting zero lost-time injuries for the quarter. The company’s malaria initiatives also delivered another significant decrease in incidence rate and all operations retained their international safety certifications, with only Kibali still working towards certification, which it plans to receive this year.

However, Randgold points out that, despite production being down 11%, at 291 912 oz, from the pre- vious record quarter at 291 912 oz, the $63.9-million profit generated from the Loulo-Gounkoto complex was 19% higher than that of the previous quarter and 25% up on the corresponding quarter in 2015.

This reflected Randgold’s tightened focus on the profitability of its mines and a 9% increase in the average gold price received for the first quarter of 2016. Total cash costs of $189-million were down 8% on the previous quarter, owing largely to the transition from contract mining to owner mining at Loulo, and the subsequent improved efficiencies and lower operating costs gene- rated at the mine.

At Kibali, the two mill circuits, usually divided between processing sulphide and oxide ores, were campaigned on sulphides for an extended period in preparation for the ramp-up in underground ore production. However, Randgold highlights that interruptions associated with this process before its successful completion, compounded by a week-long breakdown of one of the ball mills, negatively affected production and costs.

Meanwhile, commissioning of Tongon’s fourth crushing stage, which completes the mine’s flotation upgrade and crushing extension project, took “longer than expected”, Randgold says, noting that Tongon was also affected by recurring power cuts from the national grid. “Tongon continues to engage with government and the power utility on this issue and is also expanding its own generating capacity,” the company states.

Randgold’s Morila gold mine, in Mali, remained profitable, milling material with a head grade of 0.7g/t, a significant improvement in cost and profitability, compared with the previous quarter. Preparations for the transition to the treatment of tailings are well under way, while discussions with government and the local community regarding the Domba project are continuing.

Randgold CE Mark Bristow notes that Q1 of 2016 has been a busy and demanding quarter for the company, but in addition to dealing effectively with operational challenges at the mines, it also continues to reinforce the foundations of the business to ensure that it can cope with the cyclical nature of the gold mining industry.

“Despite last year’s record production, we replaced 76% of our reserves and all our depleted resources, and our exploration teams continue to hunt for additional ounces around our existing operations, as well as our next big discovery,” he says.

Bristow states that the confirmed down-plunge extensions of ore- bodies in the Loulo district is testament to Randgold’s exploration initiatives, particularly because of “the encouraging results from ongoing work in Côte d’Ivoire, where drilling at Gbongogo has confirmed a large intrusion-hosted stockwork”.

Meanwhile, work at Kibali is focused on identifying multiple mineralised shoots around the KCD openpit mine.

“We are also steadily expanding our footprint in our target areas, most recently through the Moku joint venture adjacent to Kibali,” Bristow adds. Randgold is preparing to fly a helicopter to perform a versatile time domain electromagnetic survey, or VTEM, over recently signed joint ventures at the Ngayu belt, 200 km south-west of Kibali, and is continuing regional research programmes across West and Central Africa, he adds.

“We keep strengthening our social licence through constructive engagement with and commit- ment to our host countries and com- munities,” he says.

Bristow concludes that, with Randgold’s strategy, plans and projections intact, the company can continue delivering value to stakeholders at current gold prices, which it can maintain even if the price drops. “We are quite bullish about gold’s medium- to long-term prospects, and when the cycle turns, the work we do now will have equipped us to capitalise fully on the upside.”

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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