Loulo, Mali, 12 November 2005 (LSE:RRS)(Nasdaq:GOLD) - Malian president Amadou Toumani Touré today officially opened Randgold Resources' new gold mine at Loulo in western Mali.
The mine shipped its first commercial consignment of gold on 8 November. The consignment of 8 710 fine ounces of gold, valued at some US$4 million, signals the successful completion of the mine's build-up to commercial production, a process which started when it poured its first gold on 28 September. The mine plans to ship bullion on a weekly basis from now on.
Developed at a cost of some US$113 million, it has been designed to produce an average of more than 200 000 ounces per year from open-pit operations. A complementary underground operation, which will substantially extend the size, value and life of the project, is currently being developed.
Loulo is the second major gold mine Randgold Resources has discovered and developed in Mali. The first, Morila, has produced more than 3 million ounces since it went into production in October 2000.
Speaking at the opening, Randgold Resources chief executive Dr Mark Bristow said the company believed that true value in the mining industry was created by discovery and development rather than through the reshuffling of assets.
""It is this belief that makes us take early-stage risks, as we did at Morila and again at Loulo. We were able to do that because we had confidence in the government, the people and the resources of Mali. Our faith in the country has been fully justified by the results,"" he said.
""Of course, value is never created without effort, and in getting to the stage where we are today we had to overcome some formidable challenges. Morila, for example, was technically a relatively easy mine to build, but we had to find the funding for it at a time when the market was in a slump and capital providers had little appetite for gold. Loulo, on the other hand, is coming into production in a buoyant market, but in every other respect has been a very challenging development. It's a project we've always believed in, but to get it to this point has required not just belief but also a great deal of hard work under difficult circumstances.""
Philippe Liétard chairman of Randgold Resources said western Mali had the potential to become a significant new gold region, and the infrastructure which had been put in place at Loulo was such that it could serve as the development hub not only for this region but also for the nearby goldfields of eastern Senegal.
Loulo is owned by Société des Mines de Loulo SA (Somilo) in which Randgold Resources has an 80% interest with the balance being held by the state of Mali."