London, England — MININGREVIEW.COM — 03 December 2008 – International gold mining and exploration company Randgold Resources expects production from its two operating mines in West Africa to increase in the fourth quarter, compared with the previous three months.
Financial director Graham Shuttleworth told Reuters in an interview here, however, that total 2008 output from its Morila joint venture may come in slightly lower than its 430 000 oz guidance. “We may be a little shy, but we will certainly produce more than 400 000 ounces in total from that mine,” he added.
The company is still confident of meeting its 2008 output guidance of 265 000 ounces for its 80%-owned Loulo mine.
Fourth-quarter production and grades from both mines are anticipated to increase from the third quarter – traditionally a lower quarter due to the rainy season – resulting in improved cash costs.
Reuters reports that the challenging conditions at Morila are due to the project coming towards the end of its mine life. Randgold and AngloGold Ashanti both hold 40% of Morila, with the government of Mali taking the remaining 20%.
Shuttleworth expects Randgold’s share of production from both mines to be slightly more than 400 000 oz in 2009 as increased output from Loulo more than makes up for declining production at Morilla. Attributable production in the first nine months of this year was about 321 105 oz.
Randgold is continuing to look at opportunities to buy gold assets in Africa as lower stock prices have made the assets cheaper, and companies are more willing to do transactions on either a joint venture or full acquisition basis because of the credit crunch.
“People are now coming to us,” said Shuttleworth.
Randgold is looking at assets with an internal rate of return of 20%, a minimum of 2 million oz of gold, and a 10-year mine life giving a minimum production of about 200 000 ounces a year.