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Tongon strikes hit guidance

Randgold Resources (LSE:RRS) has confirmed its Tongon gold mine in Côte d’Ivoire is not likely to reach its annual guidance of 290,000 ounces for 2018 after strike action impacted output.
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Randgold will try its best to make up for lost production at Tongon in the March quarter

Staff reporter

It said in a statement over the weekend that a series of work stoppages in the March quarter, caused by industrial action by mining contractor employees, which then spread to other operations, would affect its ability to reach the mine's guidance.

However, the company was "making a determined effort to recover most of the lost output", with operations back at full capacity. 

These efforts included processing ore from the run-of-mine and scat stockpiles during the stoppages and upgrading parts of the plant during the downtime to achieve higher and more consistent throughput in the future.   

Randgold CEO Mark Bristow kept the total group guidance for the year at 1.3-1.35 million ounces.

He said in the weekend statement that mine management, government, local authorities, workers and union leadership had all worked together to resolve the situation and to use a constructive process to workshop solutions and prevent similar issues in the future. 

"The history of Tongon has reflected the occasionally turbulent sociopolitical nature of its environment and a misunderstanding of the mining business, which is a new activity in the country, but management has dealt effectively with the challenges that have come their way," he said.

Tongon last had labour issues in January 2017 when operations stopped for five days as some employees took part in an illegal sit-in demanding ex-gratia payments. 

The mine was commissioned in 2010 and has since produced 2.7 million ounces of gold, with record results in 2017.

"Tongon has three-and-a-half years of life left as things stand, but we are actively looking for means to extend this and a number of exciting near-mine opportunities are currently being evaluated by the exploration team," Bristow said.

He added that Randgold was also exploring for new gold discoveries in other areas of its large permit portfolio in Côte d'Ivoire.

Randgold's shares were trading at £59.24 (US$81.39) Monday, up 0.17% from the previous close.