Dr. Mark Bristow, founder and Chief Executive Officer of Randgold Resources
There are various reasons for an investor to get excited about a particular company. It could be where the company is mining or the successes it's had, or it could be a dynamic leader with a bold vision. In the case of Randgold Resources Limited (NASDAQ: GOLD), investors will get excited about those three reasons and more
Randgold Resources is based out of Jersey, Channel Islands. It's traded on the London Stock Exchange and the NASDAQ, and it has several successful projects in Africa. Now here's the interesting part: The company has an impressive track record of success – one exciting discovery after another – but it has only been in business for 15 years. Recently, at PDAC, we spoke with Dr. Mark Bristow, founder and Chief Executive Officer of Randgold Resources. He shared a story with us of his own background in the industry and how he started Randgold, and then how the company grew to become the FTSE 100 company it is today.
This is a story of Dr. Bristow's visionary leadership that combines insightful entrepreneurship with an impressive amount of philanthropy:
Dr. Bristow told us: "I was educated in South Africa. I studied geology in South Africa and acquired my Master's degree and Ph.D. I was a research assistant and a junior faculty member at a university there and only joined the mining industry in 1986."
He was in the right place at the right time because, "in 1992, with all the changes in South Africa, the big mining houses in South Africa unbundled themselves." Sensing an opportunity with this unbundling, he told us about his first venture in mining company ownership: "I joined a group of people and got involved in a proxy fight over a small gold mining house. We restructured the company with the help of an investor from London, and several resource companies grew out of that event."
Again, it was a matter of being in the right place at the right time: "[at that time] Africa opened up to South Africans, and Africa hadn't been explored since its independence. There was a huge opportunity so I created a private company called Randgold Resources." Later, he added: "We had a dream to build an African-focused pure-gold company on the basis of exploration, discovery, and development. We raised $10 million of private equity in 1995 and we set about exploring."
The next step of his journey in the industry was all about taking his advanced education in mining and applying it to the continent with which he was familiar. As well, he had a vision for a big company: "We wanted a world-class gold mine, and there are only about 12 destinations in the world where the geology is such that you have the potential to find a world-class mine. In Africa, there are 3 major gold belts and one of them has more gold than any of the other gold areas in the world, put together. The second most-attractive gold belt is in West Africa. We went in there in the early 1990's and it's been fantastic for us. The third big potential gold region is in the Congo and we've established a footprint there – the largest gold project in the region. We started small but we always thought big."
Thinking big has paid off for Dr. Bristow and Randgold Resources. Today, they're a FTSE 100 company. In the 15 years since they started, they have discovered over 30 million ounces of minable gold in several gold mines. Dr. Bristow listed several of their finds in chronological order: "We found the Morila deposit in 1996" – just one year after starting the company. "We decided to develop it and the market didn't believe we could, but we did. We IPO'd in 1997 and brought the Morila Gold Mine into production in 2000. Then we discovered the Yalea Mine, and then the Tongon Mine in the northern Ivory Coast, and soon after that, the Massawa project. More recently, [we discovered] the 5 million ounce Gounkoto project."
The results are impressive: "We've discovered more than 30 million ounces of minable gold in a short time. In our short lifetime, we've outperformed every index and every peer group. We're up about 3500% on our original share price. That's what we wanted to do: Build a profitable gold mining company that created value for stakeholders – not only shareholders."
The idea of creating value for stakeholders instead of just shareholders is an intriguing idea, and not something you hear from a lot of companies. Dr. Bristow elaborated on his vision of the company and its role in the development of Africa: "To be successful in Africa, you have to share the value of the gold deposits with all interested and affected parties. You need to pay taxes to governments, you need to develop communities and provide employment, and you need to develop skills. We've created about 9,000 jobs in Africa since we started. We've paid about $900 million in taxes. We've distributed dividends and created value for our shareholders. We've built a franchise that Africans know and want in their countries."
Dr. Bristow continued, summing up his experience and sharing his excitement about the African continent and what he feels is Randgold's role: "It's been fun. Africa needs jobs. Every time you create a job in Africa, you liberate a person both economically and politically. The only way to catch Africa up with the rest of the world is to exploit its natural resources, of which there's an abundance, and use [those natural resources] to lever the continent up the economic growth curve. We are fortunate to participate in the emerging Africa. Our executive team is made up of 50% local nationals. Two of our mines are entirely staffed by locals. We've made millionaires out of local nationals. It's been a privilege to make a difference."
Not every company has the level of success to share its spoils with others. Not every leader has the kind of vision that Dr. Bristow has for Randgold and for Africa. Investors who are looking for a compelling story to go along with a potential investment will find Randgold could be worth a closer look.
Randgold Resources Limited
3rd Floor, Unity Chambers
28 Halkett Street, St Helier, Jersey, JE2 4WJ
+44 1534 735 333