London - Randgold Resources, an operator of mines in Africa, said it won’t pay a premium for the rest of the Kibali mine in Democratic Republic of Congo that it doesn’t already own.
“It doesn’t make sense to pay a premium on a premium we created,” chief executive Mark Bristow said yesterday in a phone interview.
“In principle everything has a price, but it doesn’t really fit with what Randgold stands for.”
AngloGold Ashanti may sell its 45 percent stake in Kibali to Jersey, Channel Islands-based Randgold, its partner in the project, Investec said in a note.
Such a deal would be a “simple solution” that allows AngloGold to raise the $2.1 billion (R23 billion) it had sought to fund the split of its South African mines from the company’s international assets.
AngloGold cancelled the split and a rights offer after shareholders objected.
AngloGold will consider selling assets to reduce debt, the Johannesburg-based company’s chief executive Srinivasan Venkatakrishnan said.
While Kibali is a “core” asset, he said sales would probably focus on the company’s operations in Colombia and the Obuasi mine in Ghana.
Randgold and AngloGold gained control of the Kibali mine by acquiring Moto Goldmines in 2009.
Kibali started production last year and is forecast to produce about 600,000 ounces of gold a year.
Always Interested
Bristow said that while he probably wouldn’t look to buy the rest of Kibali, his company would study other assets AngloGold might look to sell.
“We wouldn’t discount an opportunity,” he said.
“As we showed with Moto we’re not shy to be aggressive. We never say never. We’re always interested.”
Bristow said that he welcomed the idea of AngloGold listing in London, where Randgold trades, and that should the company shed its South African mines, there would be more opportunity for its international business to be involved in industry consolidation.
Bristow, who oversaw a more than fivefold rise in Randgold’s shares in the past decade, said AngloGold wouldn’t attract the same premium by merely listing in London.
“Lots of people think they’ll come to London because they’ll get labelled the same way we are,” the chief executive said. - Bloomberg News