Randgold, a Mali Coup, and the Price of Timbuktu (GOLD)

Randgold Resources Limited (NASDAQ: GOLD) is paying a price for where it does business.  The political situation in the African nation Mali is in a coup.  The gold mining outfit has extensive exposure to Mali.  For those readers who are not familiar with Mali, this is the nation where Timbuktu is located.

Randgold holds the following interests: an 80% controlling interest in the Loulo mine located in western Mali; Morila mine in Mali; 89% controlling interest in the Tongon mine located in the neighboring country of Côte d’Ivoire; 83.25% controlling interest in the Massawa project in Senegal; and 45% interest in the Kibali project, which is located in the Democratic Republic of Congo, as well as a gold deposit at Gounkoto in Mali.

All the company has noted so far about the ‘situation’ in Mali is that it is keeping a close watch on developments there “where elements of the army appear to have mounted a coup attempt.”  The CEO also said the current state of affairs in the country was calm although exact details were unclear.

Further noted, “Randgold was in touch with its sources within the country and would make a statement once it had obtained more clarity on the situation.  In the meantime, he said, operations at Loulo and Gounkoto as well as at the company’s Morila joint venture were running normally.”

These situations are often very volatile and it is impossible to know all of the details from afar.  The Randgold ADRs are down 12% at $90.94 against a 52-week range of $73.10 to $120.73.

JON C. OGG