views

Gold mines will glitter in future

RANDGOLD IS LIVING PROOF OF THE OLD ADAGE “ALL THAT GLITTERS IS GOLD”. INVESTORS THAT BOUGHT THE STOCK BACK IN 2006 AT AROUND 1,200P WILL BE OVER-THE-MOON; YESTERDAY IT CLOSED AT 4,480P.

ITS FORTHCOMING PROJECTS WOULD SUGGEST THAT RANDGOLD CAN STILL CREATE SHAREHOLDER VALUE. ONE-TIME FLAGSHIP MINE MORILA MIGHT BE ON ITS LAST LEGS NOW THAT IT HAS MOVED TO A STOCKPILE TREATMENT STAGE, BUT THE LOULO MINE IN MALI LOOKS SET TO BE A BIG EARNER, WITH PRODUCTION EXPECTED TO RISE TO 410,000 OUNCES IN 2010 – A 17 PER CENT INCREASE.

THE ONE TO WATCH IS THE CONGOLESE KIBALI MINE, WHERE IT SHARES OWNERSHIP WITH ANGLOGOLD ASHANTI. DEVELOPING THIS MINE – WHICH CONTAINS UP TO 19.76M OUNCES ACCORDING TO EARLY ESTIMATES – WILL COST SOME $800M, DEPLETING RANDGOLD’S $530M CASH RESERVES. AND THE DEMOCRATIC REPUBLIC OF CONGO GOVERNMENT HOLDS A 10 PER CENT STAKE, MEANING PROGRESS COULD BE SLOW

STILL, WITH A RISING GOLD PRICE, A 10 CENTS-A-SHARE DIVIDEND, A PROVEN TRACK RECORD AND EXCITING UNTAPPED ASSETS, SHAREHOLDERS WOULD BE WELL-ADVISED TO STICK AROUND.