London, England — MINGINGREVIEW.COM — 5 February, 2008 – International gold mining and exploration company Randgold Resources has approved the development of a new gold mine at Tongon in the Cote d’Ivoire, subject to the conclusion of a mining convention with the Government of the West African country.
Reporting its results for the fourth quarter of 2007 and the year to 31 December, the company also revealed that a strong performance from its Loulo operations in Mali had boosted Q4 net profit to US$14.5 million (more than R100 million) – up 26% on the previous quarter and 34% up on the comparable quarter in 2006.
Attributable gold production for the year of 444 573 ounces was in line with forecast, due in part to Loulo’s increased contribution of 264 467 ounces. This compensated for the shortfall in production at Morila, which was attributable to operational problems related to planning, grade control and plant lock-up.
Net profit for the year was down from US$50.9 million (about R375 million) to US$45.6 million (under R340 million) as a result of a tax adjustment of US$3.2 million (R23 million) at the Morila joint venture; a rise of US$7.1 million (R52 million) in exploration and corporate expenditure, mainly as a result of increased spending on Tongon; and costs associated with a programme to improve Loulo’s operational flexibility. The company said its annual profit would have exceeded the previous year’s had it not been for these exceptional items.
At Tongon, a Type 3 feasibility study was concluded, the report adds, and on the strength of this the Randgold Resources board has given the green light for mine development to proceed. An initial draft of a proposed mining convention has been submitted to the Cote d’Ivoire’s Ministry of Mines and Energy. Subject to agreement on this, construction of the mine will start at the end of 2008 with first gold production scheduled for the fourth quarter of 2010. Funding for Tongon has already been secured through last year’s successful US$240 million (R1.8 billion) private placement of shares.
Meanwhile the development of the Yalea underground mine at Loulo has continued to make steady progress, with the shaft advancing by a record 260m in January. Development ore should be accessed later this quarter with the first mining faces established by mid-year.
On the exploration front, Massawa in Senegal has emerged as a significant new drilling target. RAB drilling has returned high-grade results, confirming continuous mineralisation over a 2.8 km strike length. A 5 000m diamond drilling programme is scheduled to start this quarter.
Chief executive Mark Bristow says that at a time when the gold industry is faced with declining output and a dearth of quality projects, Randgold Resources is gearing up to grow production and profits. “With Loulo targeting production of 400 000 ounces per year by 2010, and Tongon stepping in to replace the declining Morila,”group attributable production is set to increase by 50% to 600 000 ounces per year by 2011,” he forecast. “In addition, a robust exploration project portfolio led by Massawa offers additional organic growth potential.”