Jersey, Channel Islands — MININGREVIEW.COM — 29 April 2008 – International gold mining and exploration company Randgold Resources has increased its stake in the Tongon project in Côte d’Ivoire from 76% to 81% through the acquisition of 5% of New Mining CI’s interest in their joint venture.
Revealing this in a statement here yesterday, Randgold pointed out that NMCI now owns 9% of the project, and the government of Côte d’Ivoire has the remaining 10%.
Randgold recently announced that it had decided to proceed with the development of a US$270 million (more than R2 billion) mine at Tongon. Site establishment is already underway and mine construction will start later this year. The mine is scheduled to produce its first gold towards the end of 2010.
The new statement adds that the purchase consideration for the NMCI interest is a cash payment of US$2 million (over R15 million) plus a funding option. Should NMCI elect not to fund its portion of the Tongon development, Randgold Resources will provide the funding on its behalf in exchange for a further 3% of the project, such funding to be re-paid from the project’s future cash flows. In this event, the Randgold Resources stake in the project will grow to 84%.
“As part of the deal, the joint venture agreement – which previously applied to all assets in the Côte d’Ivoire – has been restricted to opportunities found by Randgold Resources or introduced by NMCI,” the statement said. “As such,” it continued, “ it no longer covers any transactions Randgold Resources may enter into with third parties.”
At Randgold’s annual general meeting here yesterday, chief executive Mark Bristow commented: “We’re pleased that we’ve been able to increase our interest in Tongon, and in our Ivorian joint venture, while retaining NMCI as a partner. “We’re on record as being great believers in the future of this country, which is not only highly prospective, but still relatively unexplored, and has one of the best infrastructures in this part of the world,” he concluded.