Shares in FTSE 100 gold miner Randgold Resources sank on Thursday morning on the back of reports of a military coup in Mali, the country where two of its three main projects are located.
According to media reports, rebel troops have taken over Malian state radio and television and have announced that they have seized control of the country.
The BBC reported that a group of soldiers appeared on screen this morning with a caption identifying them as the 'Committee for the Re-establishment of Democracy and the Restoration of the State'. They intend to end the "incompetent regime" of President Amadou Toumani Toure, according to a rebel spokesperson.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
MarketWatch has said that, according to reports, the whereabouts of the President is currently unknown.
Randgold operates in the country through its Loulo and Morila gold mines. Chief Executive Mark Bristow is currently at Loulo, located 350km from the capital Bamako. As part of a Randgold statement released this morning, Bristow said that "the current state of affairs in the country was calm although exact details were unclear."
"Malians respect laws and I don't believe this will come with a high-handed change in political direction. We don't expect any subsequent governments to disregard proper and due process," Bristow said.
Despite Bristow assuring investors that operations were still running normally, the shares were still down 12.46% before midday. They had fallen by as much as 15% earlier on though.
Just last night, the company said that it had established a separate company, Gounkoto SA, to exploit the Gounkoto deposit - a sizeable project at the Loulo complex which merited a standalone operation with its own fiscal regime and exploitation permit. Randgold owns an 80% interest in Loulo and Gounkoto.
At a conference in February, Bristow claimed that the primary risk in building a business in Africa "lies not in the continent's socio-political environment but in the need to structure a business model and a management team capable of dealing effectively with the dynamics of an emerging market."
BC
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
