Gounkoto boosts Loulo Complex as development continues
Loulo, Mali, 24 January 2012 - A robust contribution from the new Gounkoto mine enhanced the capacity and flexibility of Randgold Resources’ Loulo complex to increase gold production in 2011 despite the substantial challenges presented by the development of two underground mines and the plant expansion.
Gounkoto accounted for a significant part of the complex’s annual production, giving Loulo the capacity to grow overall output while getting its Yalea underground mine on track and pressing ahead with the Gara underground development. Because it accesses the Loulo infrastructure on a toll basis, Gounkoto is expected to recoup its relatively low capital cost by the end of the first quarter of 2012. This means among other things that the State of Mali, a 20% shareholder, will get the benefit of an early dividend as well as full ownership of its stake.
The Mali government has agreed to split the Loulo mining permit, making Gounkoto a standalone operation. Chief executive Mark Bristow said this was a further instance of the importance of Randgold’s philosophy of fostering mutually beneficial partnerships with its host countries.
Bristow also said the Loulo complex represented a textbook illustration of the effectiveness of Randgold’s strategy of creating value through discovery and development, as well as of its commitment to building sustainably profitable businesses.
“The complex has grown from an 800 000 ounce resource to a fully integrated, long-life opencast and underground operation, targeting production of 500 000 ounces this year. With 9 million ounces of reserves, significant grades and a huge upside, it will be profitable at any realistically conceivable gold price,” he said.
Meanwhile, Gounkoto’s contribution has enabled Randgold to implement the drastic remedial measures it promised last year to get the stuttering Yalea underground development on track. A new team led by mining general manager Ted de Villiers, underground manager Mamou Toure and operations manager George Lawrie, has completed a complete redesign of the underground operations, addressed the geotechnical and ventilation issues, upgraded the infrastructure and produced a solid two-year plan to achieve all targets.
“Our aim is to build up the Yalea and Gara underground ore tonnage from the current 100 000tpm to 190 000tpm by the end of the year. Once we’ve reached steady state in 2013, we’ll be able to optimise the development to reduce costs,” says de Villiers.
“As we pointed out last year, the comprehensive review of all aspects of Yalea inevitably brought with it some short-term inflexibility which impacted on its 2011 performance, but we’re now rapidly catching up through a much-improved development rate and the build-up of the mining reserve. Over at Gara, meanwhile, the lessons we learned at Yalea have helped us to keep this development on track from the start. Gara has already accessed first ore and is well set to achieve its 2012 tonnage target.”
Bristow adds that underground mining is clearly going to be an important leg of Randgold’s business in future, and at Yalea it is not only establishing a strong Malian team but building a core underground skills base for the company.
“We believe that to operate sustainably in an emerging country one should develop the local people rather than rely on expatriate skills,” he said.