Randgold Looks to Add Mine Land From Smaller Rivals Seeking Cash

Randgold Resources Ltd. (RRS), a producer of the metal in Africa, said it’s looking to do deals with smaller rivals as they run out of cash because of the collapse in the gold price.

“We are constantly talking to juniors who have run out of cash,” Chief Executive Officer Mark Bristow said today in an interview. “We want to consolidate our land positions within the footprints we have chosen.”

Gold exploration companies are looking for partners or funding after prices for the metal slid 28 percent last year, the biggest annual drop since 1981, cutting off funds to the industry. Randgold currently mines in Mali, Ivory Coast and the Democratic Republic of Congo.

Randgold will look to take over the land permits of smaller rivals and run exploration at these sites, Bristow said. The company will seek to hold 51 percent of projects, potentially rising to 65 percent as it invests more in the search for new production. It announced a venture on similar terms in Senegal with GoldStone Resources Ltd. (GRL) last year.

“We’re looking for good exploration hectares, which give us the opportunity to find something ourselves,” Bristow said. “In the heady days of the bull market, juniors were our biggest competitor competing for ground. Now they’ve switched the music off.”

Randgold advanced 3.3 percent to 4,331 pence by 9:04 a.m. in London trading, the highest intraday level for more than two months.

Randgold today reported full-year profit that fell 36 percent to $278.4 million because of lower bullion prices. Production climbed 15 percent 910,374 ounces. The company, which is expanding production at its Kibali mine in the DRC, said it expects output to rise to 1.13 million to 1.2 million ounces this year.

“If all our stars align, we may get ahead of that,” Bristow said.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.