Johannesburg - Shares in gold miner Randgold Resources fell 13% on worries over the impact of unrest in Mali, home to some two-thirds of the group’s production and where renegade soldiers say they have seized power in a coup.
Randgold, which owns the Loulo, Morila and Gounkoto mines in Mali, is down 13% at 5 735 pence, underperforming a 2.7% drop in the broader UK mining sector.
“Out of any company in the sector, we would consider Randgold Resources as the best placed to deal with such a situation given the incidents and history of its activities in Ivory Coast...
"However the uncertainty will be negative for the share price as Randgold’s Malian operations represent 43% of the group net present value and 65-70% of group production in 2012,” Collins Stewart said in a morning note.
“Randgold’s gold operations in Mali are also of significant importance to the country with the group having paid over $1bn in royalties, taxes and dividends to the government to date, with Randgold being a source of substantial foreign investment in the west and south of the country.”