Randgold Resources Expects to Close Congo Mining Deal This Yearby
Approach made on Dan Gertler-owned project in February
CEO Bristow warned Congo government on review of mining code
Randgold Resources Ltd., the London-listed gold producer, is “aggressively engaged” in seeking new mining rights in northeastern Democratic Republic of Congo and expects to close a deal before the end of the year, Chief Executive Officer Mark Bristow said.
“We are in ongoing discussions with various permits holders in the area,” Bristow said Thursday in an interview at the IPAD mining conference in Congo’s capital, Kinshasa. “We are far advanced in some of the discussions.”
In February, Bristow said he had made an approach to acquire a majority stake in billionaire Dan Gertler’s Moku-Beverendi project, which has exploration permits adjoining Randgold’s Kibali mine. At the time, Gertler’s family-owned Fleurette Group said it had no plans to sell the 1,270 square-kilometer (490 square-mile) exploration project.
Gold production in the central African nation has increased exponentially over the past two years as mines including Kibali and the Namoya project in South Kivu province, run by Toronto-based Banro Corp., have begun output.
Kibali, a joint venture between Randgold, AngloGold Ashanti Ltd. of South Africa and Congo’s state-owned mining company Sokimo, produced 526,627 ounces in its first full year of operation in 2014. Kibali is on course to produce more than 600,000 ounces this year, Bristow told reporters Friday in Kinshasa.
Bristow puts some of the mine’s success down to the regulatory framework provided by Congo’s 2002 Mining Code and warned the government that recent attempts to review the legislation have risked destroying the industry. Revised regulations, which sought to increase royalties and state participation in mining projects, were submitted to the National Assembly for the session ending in June, though they were neither passed nor debated.
“For us to have built a mine the size of Kibali to global standards was only possible with solid regulation behind it,” Bristow said. “I told the government, ‘If you continued with that mining code you would destroy the mining industry.”’
Bristow said time has softened the government’s position and he’s not concerned about the still pending legislative review of the industry.
“I think the debate has dragged people back to reality,” he said.