Randgold Resources Ltd. had to haul heavy equipment more than 1,000 miles to build the roads and hydropower plants needed to construct its Kibali gold mine, the biggest in Democratic Republic of Congo.
The sprawling facility in a remote corner of a country the size of Western Europe is a high-tech operation. In one tunnel deep underground, a $1.3 million, 68-metric-ton remote-controlled digger heaves ore out of a cavernous blast hole. The ventilation system hums as 50-ton loads are slowly humped along the 3-kilometer (2-mile) track back to the surface.
The best-performing gold miner of the past decade, Randgold has built its success on getting complicated projects like Kibali into production on time and within budget. It’s the third major mine the company has brought on stream in five years, and it has indeed been a gold mine: It accounts for about a fifth of the company’s production, which tripled between 2010 and 2015 as revenue doubled to more than $1 billion.
Now, with Kibali nearing full production and no new discoveries since 2011, the miner needs to find guaranteed output growth to impress investors wary of the shrinking pool of large-scale deposits.
“They’ve done this a long time and they know they need to re-shine the halo,” said Clive Burstow, who helps manage about $475 million of natural-resource assets at London’s Baring Asset Management Ltd., including Randgold shares. “I certainly wouldn’t bet against them finding something, but don’t forget it’s getting harder to find these big elephant-sized deposits they talk about.”
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