Jersey, Channel Islands, 28 April 2008 - Randgold Resources has increased its stake in the Tongon project in Côte d’Ivoire from 76% to 81% through the acquisition of 5% of New Mining CI’s interest in their joint venture. NMCI now owns 9% of the project and the government of Côte d’Ivoire holds the remaining 10%.
Randgold Resources recently announced that it had decided to proceed with the development of a US$270 million mine at Tongon. Site establishment is already underway and mine construction will start later this year. The mine is scheduled to produce its first gold towards the end of 2010.
The purchase consideration for the NMCI interest is a cash payment of US$2 million plus a funding option. Should NMCI elect not to fund its portion of the Tongon development, Randgold Resources will provide the funding on its behalf in exchange for a further 3% of the project, such funding to be repaid from the project’s future cash flows. In this event, Randgold Resources’ stake in the project will grow to 84%.
As part of the deal, the joint venture agreement, which previously applied to all assets in the Côte d’Ivoire, has been restricted to opportunities found by Randgold Resources or introduced by NMCI. As such, it no longer covers any transactions Randgold Resources may enter into with third parties.
“We’re pleased that we’ve been able to increase our interest in Tongon and in our Ivorian joint venture while retaining NMCI as a partner,” chief executive Mark Bristow said at today’s Annual General Meeting in Jersey. “We’re on record as being great believers in the future of this country, which is not only highly prospective but still relatively unexplored, and has one of the best infrastructures in this part of the world.”"