TORONTO – The biggest risk facing the world’s top gold producers is their reluctance to hunt for big new discoveries in emerging markets, with most sticking to so called safe jurisdictions, said the head of Randgold Resources Ltd (RRS.L) on Wednesday.
The industry has since 2000 been mining gold at a faster rate than it finds new reserves and must intensify exploration and development in emerging markets to address supply problems, said Rangold Chief Executive Mark Bristow.
“What I’m preaching to the industry is the big guys have to go back to the emerging markets and invest long-term,” he said, following an investor presentation in Toronto. “It’s got to go beyond the comfort zone of the depleted and mature mining destinations of the past.”
Randgold, which built and operates five mines in Mali, the Ivory Coast and the Democratic Republic of Congo, produced 1.25 million ounces of gold in 2016. Annual profit increased 38 percent over 2015, to $294.2 million, and production costs declined.
Global gold mine production is forecast to fall more than 7 percent between 2015, its peak year, and 2019, according to Thomson Reuters GFMS. The scarcity of quality gold assets is the industry’s top issue for 2017, Macquarie Research analysts say, given the “essentially bare” cupboard of large, new deposits.
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