South Sudan is medium-term frontier of choice for Randgold -CEO

Wed Feb 5, 2014 11:46am EST

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By Ed Stoddard and Silvia Antonioli

CAPE TOWN, Feb 5 (Reuters) - Africa-focused bullion producer Randgold Resources says South Sudan is its first choice as a country to explore and mine for gold, chief executive Mark Bristow said, estimating that the conflict there will be over in four to five years.

Since secession from Sudan in 2011, the country has been wracked by a power struggle between the government and rebels, and thousands of people have been killed and 800,000 displaced since last December.

Bristow however said there was a good chance stability will return in the medium term, unlike in the Central African Republic, where he thought conflicts would last longer and which was "politically and infrastructurally challenged".

Asked where he would like to expand the company's presence into next, he said, "South Sudan, without a doubt."

"South Sudan, geologically is very attractive. We think in the longer term, when you look at the political side of it, the impasse and crisis will be resolved," he said in an interview on the sidelines of the Mining Indaba conference.

"South Sudan has already got infrastructure and it's a trading route and it's got long-standing connection into Kenya, Uganda, even the Democratic Republic of Congo."

Randgold, with gold mines in Ivory Coast, Mali and Congo, said it would spend $60 million on exploration in 2014, unlike many gold producers that are tightening their purses, hit by a more than 20 percent drop in the gold price in a year.

In the short term, Randgold is focusing on ramping up its new Kibali mine in Congo, a joint venture with AngloGold Ashanti and Congolese state-owned company, Sokimo.

The company said it is also already working with the Congolese to government to get additional permits.

For the medium term though South Sudan was the most attractive option, Bristow said.

"We have been there to pick up some information. We are talking with all the juniors who were there ... We don't need to go there yet but in four to five years' time...," he said.

Elsewhere in Africa, he said he would avoid Ghana, where its peer AngloGold is struggling with a loss-making mine, and Guinea, although geologically interesting was still too unstable politically, he said.

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