Another one bites the dust. RANGY's 160,000 oz Syama. Gold production should start falling pretty solidly. Amazing that it took so long.
Randgold shuts Syama mine in Mali
01/29/2001
Denver -- In an effort to weather low gold prices and preserve the resource for the future, Randgold Resources, which is 61%-held by Randgold &
Exploration (RANGY-Q), has suspended mining operations at the Syama gold mine in southern Mali.
The open-pit operation is 75%-held by Randgold.
Difficulties during 2000 resulted in higher cash operating costs at the mine, despite the fact that Randgold instituted a rationalization program in the first
half of the year. During the second quarter, there were power disruptions and several pitwall slides. Delays in implementing a new power plant hurt
third-quarter production.
Cash operating costs increased steadily during the year from US$299 per oz. in the first quarter to US$362 per oz. in the third quarter. The mine
produced 119,433 oz. gold in the first nine months of 2000. Production numbers from the fourth quarter have not yet been released.
Randgold says the cost of putting the operation on care-and-maintenance will be US$30 million. The mine will continue to produce gold from the
heap-leach pads as long as it remains profitable.
At the end of 1999, Syama contained 2.7 million oz. in reserves within 26.7 million tonnes grading 3.1 grams per tonne. The operation contains a
resource of 56.2 million tonnes at the same grade for 5.6 million oz.
Mothballing Syama could have a significant effect on Mali's growing gold industry -- it would lower output by as much as 10%. The Mali government
has estimated that gold production could reach 50 tonnes (1.6 million oz.) in 2001.
Most of that production would come from the Sadiola operation, which is a joint venture between South Africa's AngloGold (AU-N) and Iamgold
(IMG-T). It produced more than 500,000 oz. in 2000.
Last year, AngloGold purchased a 40% interest in the Morila mine from Randgold for US$130 million. At full operation, the mine should produce
420,000 oz. gold per year.
The Mali government holds an 18% stake in the Sadiola mine and 20% in Morila. With other investors, it holds 25% of Syama.
Despite the shortfall from Syama, Mali is expected to remain the third-largest gold-producing nation in Africa, behind South Africa and Ghana. |
