Bloomberg News

Randgold Climbs as Mali Junta Agrees to Transition: London Mover

April 10, 2012

Randgold Resources Ltd. (RRS) rose the most in more than four months in London trading after Mali’s military junta agreed to hand over power in the country that accounts for about two-thirds of the miner’s gold output.

Randgold advanced 270 pence, or 5.2 percent, to 5,425 pence by the close of trading, the steepest gain since Nov. 29. The Jersey, Channel Islands-based company reaffirmed its 2012 gold production target yesterday and said output hasn’t been “materially affected” by events in Mali.

“Given that the whole West Africa region united against the junta to force these changes, we believe that Mali will end up a relatively better and more stable place now that this latest flirt with the ’old model’ of West African politics is through,” Numis Securities said in a note to investors today. “From a geopolitical risk perspective, the whole region has just de-risked a notch.”

Mali’s military rulers agreed to hand over power to a temporary government that will organize elections, increasing the prospects that sanctions imposed since the coup will be removed. Soldiers unhappy with a lack of resources to combat Touareg rebels overthrew President Amadou Toure’s government on March 22.

Randgold operates the Loulo and Gounkoto mines, holding 80 percent stakes, as well as the West African country’s Morila operation. It produced 445,600 ounces of gold in Mali last year, about 64 percent of total output.

Avion Gold Corp. (AVR), which also mines gold in Mali, surged the most in more than six weeks yesterday in Toronto trading. Avion produced 26,256 ounces of gold from its Tabakoto/Segala operations in the first three months of 2012. AngloGold Ashanti Ltd. (ANG) and Iamgold Corp. (IMG) also operate mines in the country.

Randgold, which earlier rose as much 10 percent, posted the biggest gain in the city’s benchmark FTSE 100 index (UKX) while the FTSE 350 Mining Index slumped 3.9 percent.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


Silicon Valley State of Mind
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus