Randgold (GOLD) moves on five African countries
Randgold Resources moves on five African countries
Creamer Media's Mining Weekly -- 9 May 2006
RANDGOLD London- and Nasdaq-listed gold miner Randgold Resources has indicated that the next quarter of the year will be taken up with drilling in five African countries as it seeks to build on its current portfolio.
The miner, which reported a net profit of $13-million for the March quarter, saw the first full inclusion of production from its second Mali mine, Loulo.
Loulo, which became operational on November 8, 2005, saw throughput at 722 000 t.
Randgold saw profit from mining increase to $33-million, largely as a result of the inclusion of Loulo and a higher gold price.
While Randgold has not ruled out corporate activity, stating that it “continues to evaluate various opportunities both at corporate and project levels”, it is focused on “generating its own opportunities”.
Remaining focused on Africa's key gold belts, Randgold Resources has an aggressive period of drilling planned for the second quarter of this year.
Drilling is expected in five African countries, Mali, Senegal, Burkina Faso, Côte d'Ivoire and Tanzania. These five countries will host seven drill projects.
CEO Dr Mark Bristow noted that most of the gold depleted as a result of mining last year had been replaced by the end of the year, however, it continues to seek new orebodies and develop brownfields drilling.
For example, positive results from the Morila exploration initiative have confirmed the company's belief in the further prospectivity of this area.
In addition to the ongoing hunt for new ounces at and around Loulo and Morila, and the tactical programme at Tongon, several additional targets have been lined up for drilling in Senegal while a four-hole drilling programme has been completed at Kiabakari in Tanzania.
The company is also progressing early stage exploration programmes in Burkina Faso and Ghana.
The prefeasibility-stage Tongon project in the Côte d'Ivoire, which has the potential to become Randgold Resources' third mine, is being revived in anticipation of that country's return to political stability following the general elections scheduled for later this year.
A team has moved onto site to complete plans for a ten-borehole tactical drilling project, which will form the basis for planning the final feasibility-drilling programme.
If the election outcome is satisfactory, the company plans to complete the final feasibility study within two years.
In the meantime it has been granted two new permits in the south of the country and has started early-stage reconnaissance work there.
Reporting its results on Monday, the company said the second phase of the Loulo plant - threatened with derailment by the defaulting contractor - was back on track for completion towards the end of the second quarter.
Meanwhile Loulo's Phase 1 throughput, recoveries and costs before additional costs relating to temporary crushing were in line with expectations, and production of 64 677 ounces in the mine's first full quarter of operation was on target.
Planning for the underground developments to complement Loulo's existing open-pit operations progressed with the completion of the detailed design and production scheduling of the Yalea underground section.
Already, a detailed mine design and production scheduling has been completed and a twin decline system for underground access, 4,5 m high and 4,5 m wide, has replaced the previous single decline access.
One decline will be equipped with a conveyor belt for rock transport and the other decline is to be used for vehicle access.
“This design is expected to bring about advantages in safety, ventilation and timing of the project,” said the miner in its report.
A contractor will be appointed next month and main decline development is due to start towards the end of 2006, with the first stoping ore likely to be accessed by the end of 2007.
In addition, the mine ventilation design has been completed and the boxcut and portal design is in the process of being completed and portal construction for the conveyor decline is expected to start in the third quarter of 2006.
The conveyor decline development is scheduled to start in the fourth quarter of 2006, while accessing of first development ore is expected in 2007.
First stoping ore is expected by the end of 2007 and the heavy-vehicle fleet for Yalea has been completed with a delivery schedule set for 2006 and 2007.
The underground development plan for Loulo 0 is also currently being revised.
Work is in progress to further review the plan to integrate ore tonages from the opencast and underground sources.
This will form the basis of a decision to increase plant capacity to 300 000 t per month from the current nameplate design of 200 000 t a month.
The company's Morila joint venture also pleased the company, with the plant expansion reaching the designed throughput for the first time.
This 11% increase in throughput partially compensated for the expected grade decline and production for the quarter was a satisfactory 135 779 ounces.
Bristow said a particularly significant aspect of what had generally been a challenging but good quarter was the increase to 56% in the reserve-to-resource ratio at Loulo.
“While the discovery of new ounces is important, it's the conversion of these resources to reserves that is really critical in creating value.
“We have been very successful in converting the Yalea resources to reserves as a result of the deep-drilling programme and the completion of the detailed underground mine plan,” he said.
Exploration within the Loulo region continued to highlight the potential for further extensions to the known orebodies as well as identifying new deposits.
Reserve replacement was also achieved at Morila, where an infill and resource-extension drilling programme has produced an additional 510 000 ounces of reserves and has increased the proportion of reserves in the higher-confidence proven category from 50% to 70%.
Total attributable production for the quarter was 118 989 ounces at total cash costs of $281/oz. This compares to 66 908 ounces at total cash costs of $211/oz in the March 2005 quarter.
The increase in production and cash costs is due to the additional ounces from Loulo's first full quarter of production.
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