Randgold seeks to increase reserves at Senegal deposit

Abidjan - Randgold Resources needs to add an extra 1 million ounces of reserves to make the development of its Massawa resource in Senegal feasible, CEO Mark Bristow said.

Massawa currently has 4.8 million ounces of resources, Bristow told reporters in Abidjan, Ivory Coast, on Saturday. Sofia, a new gold project nearby, needs an additional 1 million ounces to make Massawa worthwhile, he said.

"We will update the feasibility studies in Massawa," including the Sofia site, at the end of the year, Bristow said. The drilling programme at Sofia and its results are key to the outcome for the studies, he said.

Randgold has invested $70m in Senegal since the early 1990s, with the majority spent on exploration drilling and studies at Massawa, Bristow said.

Randgold’s feasibility studies for all projects are based on an assumed gold price of $1 000 an ounce, Bristow said, well below Friday’s spot price of about $1 322. The metal has risen about 25% in 2016.

Bristow said production at the company’s Tongon mine in Ivory Coast will total 260 000 ounces this year, rising to 300 000 ounces in 2017. Power shortages have crimped output there recently, but the mine remains profitable, he said.

Bristow said the company will concentrate on exploration in West Africa, and had invested $823m into its Ivory Coast operations since 2011.