/ 26 September 2007

Randgold CEO says earnings will be higher

The head of African miner Randgold Resources on Tuesday said net profit in its third and fourth quarters should be in line with the first-quarter level, citing higher bullion prices.

In addition, Randgold chief executive Mark Bristow told Reuters in an interview at the Denver Gold Forum that he expects mining operation in the war-divided Côte d’Ivoire should begin by the end of next year.

”We are working with the government there, going through all the permitting and the licenses,” Bristow said after his presentation to analysts and fund managers at North America’s annual gold industry meeting.

Bristow admitted that there were logistic and administration challenges about mining in Côte d’Ivoire.

”If you run a business like mine in Africa, the risk is inherent,” said Bristow, a native of South Africa.

”We would not go to a country where you have to arm a private army. Our security guards have never carried firearms. We believe that the government of the country is responsible for its safety and security,” Bristow said.

Growth strategy, bullish outlook

Asked about Randgold’s strategy to grow reserves, Bristow said that the company preferred to produce itself by investing in explorations even in the bad times.

Yet, Bristow said that ”We are always looking for M&A opportunities, but it’s not our core business. We don’t rely on acquisitions for the longevity of our organisation.”

Bristow said that he would look for projects that have no more than three million ounces of potential gold, and those that yield 20% real rate of return at a gold price of $525.

”On M&A, we look for development projects, we are not interested in buying straight ounces,” Bristow added.

Randgold’s CEO also said third and fourth quarter earnings would be higher than second quarter earnings.

”Over the next two quarters, we should be in line with the first quarter of this year. If the gold price is a little bit higher, $15-million is not unachievable,” he said.

Randgold, whose gold mines are mostly based in West Africa, posted first-quarter net profit of $12,7-million.

In August, Bristow also said that the company could post earnings of around $15-million for the third and fourth quarters, after it reported lower profit of $6,8-million for the second quarter ended on June 30. – Reuters