The giant Kibali gold project, in the Democratic Republic of Congo (DRC), had successfully started production ahead of its original year-end target and was still in line with capital fore- casts, part-owner Randgold Resources CEO Mark Bristow said ahead of addressing the Denver Gold Forum last week.

Bristow said that Randgold, the developer and operator of the project, had only moved on site in January 2010, and since then had built a world-class gold mine in one of Africa’s remotest regions and, in the process, more than doubled its reserves to 11-million ounces of gold and increased its resources to more than 21-million ounces.

“It has been an enormous feat of geology, metallurgy, engineering and logistics, as well as negotiation and diplomacy, and its success is a tribute to the Randgold team as well as the Congolese authorities, the local community and our business partners, contractors and suppliers,” Bristow said.

The $1.7-billion mine – funded by Randgold and its partner, AngloGold Ashanti, which were also funding Sokimo, the DRC government-owned gold mining company that holds a 10% carried interest in the joint venture – was now expected to comfortably surpass its production target of 30 000 oz for 2013, and was on track to meet next year’s forecast of 550 000 oz.

The project was being developed in two phases. In the first, the plant’s oxide circuit had been commissioned early and was treating oxide ore from the stockpile of more than a million tonnes already pro- duced by the openpit mine.

Gold sales were scheduled to start next month when the circuit was in a steady state.

The sulphide circuit would be commissioned in the second quarter of 2014.

Phase 2, which ran concurrently with Phase 1, but extended to 2016, would include completing the underground mine, where development was already well advanced.

The underground mine was scheduled to access first ore in early 2015, with stoping operations starting later in that year. Kibali would also commission four hydropower facilities during the two phases to allow the mine to access low-cost energy from the abundant hydropower potential in the DRC.

Bristow said the enormous relocation programme, which had involved resettling more than 4 000 households in 14 villages on the Kibali site to a new model town, Kokiza, had also been completed on schedule. The administration of Kokiza was now in the process of being handed over to a local administration.

“Kibali is the fifth world-class gold mine Randgold has delivered to its stakeholders since 2000, when Morila was commissioned, and it is significant that we are doing so at a time when the gold mining industry gene- rally is cancelling projects, cutting budgets and revising growth plans downwards in the face of the drop in the gold price.

“This again illustrates the merit of Randgold’s long-term strategy of creating value through discovery and development, and of continuing to invest in our future even when the gold price turns down,” Bristow said.

The Randgold CEO also said that the mining industry was now again poised to struggle for survival, having failed to create any “real” value during gold’s ten-year bull run.

“The problem quite simply is that, as the gold price increased, there was a rush to increase production at all costs. Because of a lack of past investment in growth, the industry has not been able to replace the ore it has mined at the same grade.

“In fact, its reserve grade has decreased by more than half over this period. And because it has continued mining at above the reserve grade, the problem has got worse every quarter,” he said.

Bristow added that, in order to maintain or increase production when the grade had halved, one had to double the mining and processing capacity, which meant that the capital and operating costs per ounce also doubled.

“This is the real issue facing the industry. In order to reduce cash costs and deliver improved returns, the industry will have to move its operations back up the grade curve, which will entail taking out a lot of current production, painful as that may be,” he said.

Bristow in July said he hoped that Kibali would serve as the platform for further gold discoveries and developments in the DRC, while the company would also continue its engagement with the DRC government in its review of the mining code.

“We trust that this will not be amended in a way that discourages further invest- ment here. The current code serves the State and the industry fairly well and Kibali is the first gold mine to be developed under this code. What is required is not a change to that code but its effective application,” he said at the time.