Randgold Resources said it is keeping a close watch on developments in Mali, where elements of the army appear to have mounted a coup attempt. Randgold CEO Mark Bristow, speaking from the company’s Loulo complex in the west of Mali some 350 km from the capital Bamako, said the current state of affairs in the country were calm although exact details were unclear.
Randgold was in touch with its sources within the country and would make a statement once it had obtained more clarity on the situation. In the meantime, he said operations at Loulo and Gounkoto as well as at the company’s Morila joint venture were running normally.
“Malians respect laws and I don’t believe this will come with a high-handed change in political direction. We don’t expect any subsequent governments to disregard proper and due process,” Bristow said.
The convention for Randgold Resources’ new Gounkoto mine in Mali was signed recently in Bamako by Malian Minister of Mines Amadou Cisse and Bristow. Discovered in 2009, the 5.5 million oz Gounkoto deposit began production in June 2011. It lay within Randgold’s Loulo concession, which also hosts the company’s flagship Loulo complex, and the ore from Gounkoto is toll treated at the Loulo plant, some 25 km away. It was agreed that the size of the Gounkoto deposit merited a standalone operation with its own fiscal regime and exploitation permit, as defined by the new convention and a separate company, Gounkoto SA, was established to exploit the deposit. It is owned in the same proportions as Loulo, with Randgold holding 80% and the State of Mali 20%, and Randgold has funded the capital development cost of more than $100 million.
“Both partners gain from the establishment of Gounkoto as a separate corporate entity. The State of Mali will be entitled to a preferential dividend while Randgold will enjoy an initial corporate tax exoneration of two years with an opportunity to extend this to five years in the event of further investment, like an underground mine,” Bristow said.
He noted the Gounkoto convention was the latest milestone in the long and mutually beneficial partnership between the State of Mali and Randgold.