Dakar, Senegal — MININGREVIEW.COM — 18 November 2008 – International gold mining and exploration company Randgold Resources is looking to snap up assets – particularly in Africa – from rival diggers left struggling by the financial crisis, as it seeks to boost its reserves.
“We’re looking now, and we’re looking very hard. We’ve got our eyes on a few assets, “ said chief executive Mark Bristow. “The challenge is that most of the large resources, assets and mines we would be interested in are owned by majors,” he told Reuters in an interview here
“Other assets are located in difficult places, and none of them could be converted into mines within the next two years,” Bristow continued.
“An ideal target would contain 3 million ounces of gold, have an internal rate of return of 20%, and be viable as a mine even if the world gold price fell to US$650 per ounce,” he added.
Mining firm valuations have been hammered in the past few months by a worsening outlook for commodity prices, as the likelihood of a severe recession in Europe and the United States has increased.
Reuters reports that the UK mining index has lost 56% this year – though Randgold itself is up 6% – and lower share prices would mean lower price tags.
The news agency adds that, as well as seeking firms that have proven assets, Randgold – which sits on a pot of US$260 million (R2.7 billion) in cash – has been looking at expanding its footprint on the continent.
Already digging at two sites in Mali – where Bristow says his firm is the second-biggest employer after the state – the company aims to produce its first metal in nearby Ivory Coast by 2010 and Senegal by 2012. It has been exploring in Ghana and Burkina Faso in the west and Tanzania in the east, and plans to cast an analytical eye over data collected by explorers working in central Africa.
Pointing out on a map a band of gold mineralisation that passes through parts of the Democratic Republic of Congo (DRC), Tanzania, the Central African Republic and Cameroon, Bristow says Randgold is moving a team into offices in Mwanza on the Tanzanian shore of Lake Victoria, which will serve as a vantage point for central Africa.