RandGold shows confidence amid tough mining environment

by Chris Bishop 0

Most investors at the 2015 Mining Indaba want to hear about the woes of South Africa – still one of Africa’s largest miners – and its struggles against strikes, power cuts and uncertainty over regulations. 

Many investors are fighting shy of a country that carried out 40 per cent of the world’s mining production 30 years ago and now struggles to deliver 5 per cent. 

Meanwhile, one of the early bright spots came from a man who has left the country of his birth for risk and reward in other parts of the continent. 

Mark Bristow, the CEO of RandGold Resources, has spent 20 years building mines everywhere from Mali to the Democratic Republic of Congo. His company’s results, released at 9AM CAT, show this strategy of heading for the byways of African mining is paying off. 

In its Q4 figures, the company recorded a year-on-year production of 26 per cent, to 1 147 414oz in a company that is debt free and has paid a dividend at a time when most mining companies are not. This is despite a 17 per cent drop in profit year-on-year, because of the fall in the gold price.

Bristow said his company is making a 20 per cent real return on investment. 

“We based our business around a cost of 1,000 US dollars an ounce and when the gold price went through that level we took the cash and paid off our debt. It is called, capital discipline,” said Bristow.