HomeCentral AfricaRandgold looks at DRC

Randgold looks at DRC

Mark Bristow,
CEO, Randgold
Hollywood, United States — MININGREVIEW.COM — 26 February 2009 – International gold mining and exploration company Randgold Resources – the owner of mines in West Africa – has held talks about acquiring Moto Goldmines Limited, the company planning to develop the largest gold mine in the Democratic Republic of Congo (DRC).

Revealing this in an interview with Bloomberg News here, CEO Mark Bristow said he had spoken with the management of Subiaco, Australia-based Moto, about making an all-stock purchase of the company. “Some Moto shareholders had indicated that they might support such a transaction,” he added.

“We’ve had discussions with management to try to convince them that an equity deal with us is good for everyone,” said Bristow, who is attending the BMO Capital Market Global Metals and Mining Conference. “It makes sense to do a paper deal.”

Bristow – who has overseen construction of two mines in Mali and a third in Ivory Coast – wants to tap Moto’s Congolese gold resource, which may contain as many as 22 million ounces of the metal. Bloomberg reports that Moto executives negotiated with the DRC government for more than two years before agreeing this year to give the state 30% of the project, which is in the country’s northeast.

Moto chairman Sam Jonah would not comment on whether his company had been in talks with Randgold on a possible transaction. “If we had anything to share, we’d share it with the public,” Jonah said in a telephone interview from Johannesburg. “There is nothing of significance we need to share.”

Moto’s DRC project will yield 400 000 ounces of gold a year and is expected to start production in 2012, according to company president Andrew Dinning. The mine is expected to cost US$483 million (R4.8 billion) to develop, and will produce 3.3 million ounces of gold over about nine years at a cost of US$294 an ounce.

“Digging the mine will first require environmental permitting, construction of supporting infrastructure and the relocation of people,” Bristow said. “It’s a long way to go before you can develop it,” he added.