Power cuts weigh on Randgold’s Ivory Coast mine output

Africa-focused gold producer Randgold Resources (LON:RRS) said Monday that recent power cuts in Ivory Coast has negatively impacted output and equipment at its Tongon gold mine in the first three months of this year.

Speaking to reporters, chief executive Mark Bristow said the mine was Ivory Coast's main power consumer, paying $14 million (8 billion CFA francs) per year for the item.

Randgold has commissioned a fourth-stage crushing circuit, which completes an extensive project aimed to boost output and gold recovery at Tongon.

Despite the power issues, he noted that output from the mine was up 7% to 242,948 ounces last year as a flotation upgrade and crushing circuit extension programme began delivering results.

Randgold also noted it has commissioned a fourth-stage crushing circuit, which completes an extensive capital project designed to boost throughput and gold recovery at Tongon.

The company is now targeting an annual gold production of 290,000 ounces from the mine this year, but Bristow acknowledged there were still “significant challenges” in the way.

“Chief among these [challenges] is the continued instability of the grid power supply, which has a major impact on the mine's cost structure,” Bristow said in a statement. “The Tongon team is in discussion with the Ivorian power utility to resolve this problem," he added.

Randgold, one of the very few bullion miners that was able to keep its head above the water despite plummeting gold prices last year, has repeatedly touted its intention to acquire new assets to add to its four operating mines. But it has stuck rigidly to criteria about the size of return it wants and the amount of gold a mine must be capable of producing.

Despite trading lower on Monday afternoon (the stock was down 2.1% to 6,400p in London at 1:43 GMT), Randgold’s shares have rallied 55% so far this year.