Randgold jumps on strong performance at Kibali
Randgold Resources shares (LON:RSS,NASDAQ:GOLD) enjoyed a 4% bounce on Monday after the miner announced its Kibali project in the Democratic Republic of Congo (DRC) is exceeding expectations.
Randgold CEO Mark Bristow told a media briefing Kibali has "more than met the objectives" set for it at the time of its acquisition in September 2009.
The $1.7 billion project shared with AngloGold Ashanti is expected to exceed its gold production for its first full quarter of operation to end December and meet its forecast of 550,000 ounces for the current year.
Like all the other gold mines Jersey-based Randgold has developed, it should also make a net profit in its first quarter, said Bristow, adding that shaft sinking is underway at the complex's underground mine and the first of four hydropower stations is due to be commissioned soon.
The project, initially scheduled for commercial production only in 2015 required the resettlement of more than 4000 families from 14 villages in a new town.
Bristow said 6,065 of the 7,660 workers on site at Kibali at the end of December 2013 were Congolese:
"This world-class gold mining complex we are developing at Kibali will make a major contribution to the DRC's economy as well as a significant improvement in the local quality of life. As part of our resettlement programme, for example, we have built 14 schools, five medical centres, five markets, 29 chapels for various religious denominations and 70 kilometres of road. The increase in local economic activity can be measured at the nearby Durba trade centre, where the population has grown from 10000 to 50000 people over the past three years," Bristow said.
Randgold, worth $6 billion on the Nasdaq, also increased mineral reserves at Kibali to 11 million ounces of gold.
Randgold has an annual production target of 1.2 million ounces by 2015 and is on track to produce 900,000 – 950,000 oz of gold this year at a cost of $700/oz to $750/oz.