Gold digger Randgold Resources had suffered a series of setbacks at its Tongon mine in Cte d'Ivoire which will have a negative impact on its production for the fourth quarter of this year.
The company now expects group production for the year to drop from between 740,000 and 760,000 ounces to between 690,000 to 700,000 ounces, which it says still represents a significant increase over 2010.
Proving the old adage "it never rains, but it pours," the company said that the wet weather and problems associated with mining through transitional ore persisted into the fourth quarter, but on top of that it suffered a number of other setbacks, including a temporary work stoppage as a result of an industrial dispute, and technical issues associated with the change-over from diesel-generated power to the Cte d'Ivoire's national grid. As a result, the pit suffered significant down-time.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
The firm said operating conditions in the pit have improved considerably since the end of the rainy season.
Latest Videos FromMoneyWeek
However, the mine also suffered a major failure of the barring gear on one of its mills last Friday, which caused management to shut down that mill and another in the interests of personnel safety and to protect the mill from a similar failure while advice was sought from the equipment supplier and consultants.
In the meantime, a spare barring gear was ordered from the company's Loulo complex in Mali under its group strategic spares plan.
The company expects that the second mill will be restarted by Tuesday once the integrity of its barring gear has been verified, while the faulty mill has to await the arrival of the spare gear from Loulo and an inspection by the equipment suppliers. It could take up to 10 days before it is brought back on line.
In addition, at Loulo, the mine has experienced lower production than forecast in the quarter as a result of the carry-over of the delay in the in-pit mining sequence at Gounkoto as well as some down-time associated with the tie-in of the new tailings pipeline and the third mill expansion programme.
However, the company was keen to emphasise that the recent performance of the Loulo/Gounkoto complex has shown significant progress towards getting back in line with its fourth quarter production forecast.
NR
