Randgold lowers Ivory Coast output forecast on power cuts
Randgold Resources' Tongon mine in Ivory Coast will have a slightly lower gold output this year than previously expected mainly owing to an erratic power supply, Chief Executive Mark Bristow has said.
Advertisement
The mine, one of five operated by the London-listed company in three African countries, is on track to produce 260,000 ounces of gold this year, up from 242,948 ounces in 2015, Bristow said.
Power cuts have hurt output and equipment at the Tongon mine, but while production will fall short of a previous estimate of 290,000 ounces, Bristow said an upgrade to its generator would ramp it up to 300,000 ounces in 2017.
French-speaking West Africa's largest economy, normally one of the region's best lit, is struggling to meet a surge in demand for electricity to power its expanding postwar economy.
"We had disturbances in the power supply from the national grid," Bristow said. "We are in discussions with the government to stabilise the supply."
Randgold's share price has more than doubled this year, as a recovery in the gold price driven by concerns over geopolitical risk and, more recently, uncertainty surrounding Britain's vote to leave the European Union has lifted stocks of gold miners. Gold is seen by many as a safe-haven asset in difficult times.
Shares traded 1.3 percent higher on Friday at 88.5 pounds ($116.02).
Bristow said Tongon would this month pay US$22 million in dividends to shareholders, its first payout.
Other Trending Stories
The company, which has mines in Congo, Mali and Ivory Coast, owns 89 percent of Tongon while the Ivorian government has a 10 percent stake and a local company has 1 percent.
According to Randgold's website, total production for the group is expected to be around 1.3 million ounces this year.
Bristow said exploration in the northwestern Ivory Coast area of Mankono had provisionally revealed between 700,000 and 1 million ounces, but that they would need to find three million ounces for it to be profitable.