This production feat boosted London and Nasdaq-listed gold-mining and development company Randgold Resources’ results (the company has a 40% share in the mine), with the company posting a 475% rise in profit from operations for the year to December.
The remaining 60% of the mine is owned by AngloGold (40%) and the Malian government (20%).
In an interview with Mining Weekly prior to the release of the results earlier this month, Randgold Resources GM projects and evaluations Adrian Reynolds observed that, over and above the success the mine has brought the gold-mining company, the West African country has also gained much.
“The difference the investment has made to Mali has been substantial. “One can see this just by travelling into the capital city, Bamako.
“What it was when we first started going into the country, and what it is today, are two different places,” stated Reynolds.
“The rapid emergence of new buildings, cars and businesses is evidence of this development,” he adds.
A problem that has been experienced by the owners of Morila, however, has been one of heightened expectation by the people living in the mine area.
The mine is located in a rural area and the people do not understand that the benefits are not necessarily going to flow directly to the region. The mine owners pay taxes, royalties and duties to the central government – which has its own policy for the country – that sometimes does not filter down to the local level.
As a result of the confusion that sometimes occurs, the owners of Morila mine have set up structures whereby they can communicate with the local people, explaining what is happening and where the investment is heading.
A trust was set up at Morila at the end of last year into which the mine will be placing a sum of money for the local people to develop community projects they feel are sustainable.
Schools and clinics were developed from the beginning, but the trust has been established to take a longer-term view.
“Every mine has a limited life and, at the end of it, it is important that development is not lost,” remarked Reynolds.
Types of community projects that will be looked at include agricultural, water and health projects. “The project must make sense and be sustainable for it to be given the go-ahead, and the community is given assistance in developing such projects,” said Reynolds.
The possibility of bringing in non-governmental organisations to assist in the rollout of these projects is being investigated.
Randgold Resources discovered and developed the Morila mine, originally having an 80% share in it and the Malian government a 20% share.
The company then sold half of its interest to AngloGold, and the two companies are today joint managers of the mine, with AngloGold undertaking the day-to-day operation of the mine.
“It is a joint venture that works very well in that we have quarterly meetings on site and constant contact with the mine and with AngloGold head office in Johannesburg.
“Working with AngloGold is advantageous for a company like Randgold Resources, which is not a major gold producer.
“When running a large mine like Morila, it is good to have the depth and strength of a company like AngloGold behind you,” indicated Reynolds.
This is not to say that Randgold Resources would not take on such a large project on its own, however. Reynolds points out that such a partnership is beneficial to the company’s shareholders as one is able to monetarise some of the project.
“We were at the stage where money was tight, we had this project, which we realised was great, so we sold half of it to AngloGold for $132-million, and were able to give that back to the shareholders.
“More importantly, we kept half, which allowed us to give the shareholders the upside in any future discoveries and developments,” explained Reynolds.
Randgold Resources intends to expand its involvement in Mali beyond Morila. It owns an advanced-stage project at Loulo, which is in the feasibility stage, with proved and probable reserves of 1,52-million ounces.
Over the past year, work has focused on updating the feasibility study.
After reoptimisation and additional metallurgical testwork, which confirmed the orebodies’ reaction to a gravity separation process, a 3 000-m-plus drilling programme was completed.
Detailed mine planning and scheduling is in progress to determine the best mining rate for the two pits.
Work is focused on pursuing specific opportunities which will further enhance the project.
These relate to optimisation of the mining rate, government cooperation with off-mine infrastructure and the possible supply of hydroelectric power.
The Malian government has formed an interministerial commission, which is now actively focusing on issues of access roads, power and water supply, as well as outstanding fiscal issues.
The final feasibility documentation is expected to be completed this quarter.
The company’s other advanced-stage project, at Tongon in C