Ram :
I have to say immediately that I am no expert on Randgold --- or on much else, for that matter.
Randgold is a company that has bewildered me since its inception. I have watched its shares on the JSE zoom up to R30 --- then all the way down to R3 --- and then up to R5 where it is, more or less, at the moment. From the beginning I have heard that Mr Kebble is a genius who is capable of taking dying (or even dead) gold mines and, in the face of escalating wage demands by the increasingly vociferous mine trade union here, and other rising costs, make a substantial profit. And, a big one at that. I have not been able to understand how he does it.
My reading of the latest figures shows that the loss on mining production is less than previously and mining costs are coming down. So, possibly, in the future one can look forward to a profit of some sort. But, nothing yet. I know the various mines in the group are ALLEGEDLY sitting on many millions of ounces of gold. But to get that gold out of the ground, and at a profit FOR SHAREHOLDERS, is another matter entirely. For me, the imponderables of low grade / high cost gold mining at a time of a very low gold price, and especially in "unknown" places, make such an investment particularly unattractive. And, I nearly forgot the large debt. I guess I just don't have the "balls"!
I know nothing about the Syma mine nor about goldfields in Mali, Tanzania, Senegal and Burkino Faso, where Randgold is also busy. As far as the merger with JCI and Cons Af Mines is concerned I can also tell you very little. As you know, JCI has been asset stripped by Anglo and what's left is ageing Randfontein and, of course, Western Areas. I can tell you nothing about the Marsfontein diamond mine in which Randgold, apparently, also has an interest. The Randgold share price on the JSE has done very little in anticipation of this merger and so, it would seem, the "market" isn't too excited about it. I would guess that the major asset in the merged group will be Western Areas and, compared to that, the rest won't be worth too much. At least with the POG depressed, as it is.
Clearly, Randgold is an investment for the "specialist" or expert and, having read various contributions by PolarBear, I would say he is definitely such a man. |
