3rd Feb 2017 11:25
LONDON (Alliance News) - Randgold Resources Ltd on Friday said the Tongon mine in the Ivory Coast is on track to deliver full year production in line with its revised guidance for 2016, helping it stay on track for further volume growth over the next four years.
The African gold miner has faced issues at Tongon throughout 2016, including an intermittent power supply, equipment breakdowns and, most recently, an "illegal sit-in" by some employees that were demanding bonus payments.
In August, Randgold was prompted to lower its full year guidance for the Tongon mine to 260,000 ounces from the original 290,000 ounce goal. On Friday, Randgold confirmed the mine will meet that revised target.
In 2017, Tongon is expected to produce 285,000 ounces each year, still lower than the original guidance for 2016. In 2018, 2019 and 2020, annual production from Tongon will remain stable at 290,000 ounces.
Tongon produced 242,948 ounces in 2015.
Speaking at a briefing for local media, Chief Executive Mark Bristow said the Tongon team "had delivered on all the critical issues, stabilising the optimised crushing circuit, minimising the impact of grid power supply disruptions and implementing an effective preventative maintenance plan."
In the first half of 2016, Tongon lost 46 days of production following a breakdown, which was the incident that prompted the original full year guidance for Tongon to be reduced. Tongon produced 7.0% less in the second quarter of 2016 than the first as a result.
"These actions have supported a continuing upward trend in the mine's throughput and recovery rates and hence in gold production at a lower cost," the CEO added.
Late on January 26, "some employees demanding annual ex gratia payments" began protesting through a sit-in that was described by Randgold as "illegal".
Fortunately, Randgold managed to settle the matter quickly, in just less than one week, after confirming an agreement with the workers had been reached on Wednesday earlier this week. Rangold, however, gave no further details of the settlement.
"With Tongon now running smoothly, we're focusing on extending the life of the mine by finding additional resources and reserves in the extensions to the current orebodies, the satellites around the mine and other targets within trucking distance," said Bristow on Friday.
Some shareholders may be weary of the confidence shown, however, as Bristow had said back in November that the Tongon mine had got "back on track", only to be followed by the sit-in.
Notably, Bristow showed that confidence in November after Tongon's third quarter performance improved significantly from the second, with production rising 41% quarter-on-quarter while cash costs declined 21%.
The chief executive also said on Friday that safety has continued to improve at Tongon and reiterated the company's commitment to investing in community development projects in the country.
Updating the company's exploration activities in the Ivory Coast, Bristow said progress was being made at the Mankono permit and the new targets defined within the Boundiali belt, highlighting the importance of the Ivory Coast in Randgold's search for its next world class discovery.
Randgold will publish its fourth quarter and full year results for 2016 on Monday.
By Joshua Warner; [email protected]; @JoshAlliance
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