Randgold Resources’ success of its Tongon Gold Mine investment in Ivory Coast is a typical case of fortune favouring the bold.
Investing in a mining in a country that had just been struggling to stabilise soon after a civil war five years ago appeared to be foolhardy, but it was worthwhile, at least according to the company’s recent quarterly financials.
According to the company’s press release which quotes Randgold Chief Executive, Mark Bristow, so far, the company has registered sufficient revenue, with which it has paid off its shareholders’ loans of $448 million. Tongon Mine needed a capital investment of $580 million. “We are in a dividend-paying position,” he says, telling a media gathering in Abidjan, Ivory Coast.
The Ivory Coast Government, which has a 10% stake in Tongon Mine, has earned royalities and taxes amounting to $90 million. As the mine will start paying dividends, the state will earn more revenue.
Randgold’s Tongoni’s investment has swum against the tide of negative growth in the global industry, especially characterised by capital write-downs and impairments.