Numis has adjusted its target price from £8 (US$10.85) to £6 on the back of "industrial unrest" at its Tongon mine in Côte d'Ivoire, a mining code upheaval in the Democratic Republic of Congo that hosts its Kibali joint venture, and "recent unrest" in Mali, where it runs the massive Loulo-Gounkoto mine complex.

 

This is despite a company statement early this week that, while outlining the difficulties at Tongon, reiterated 2018 guidance of 1.3-1.35 million ounces. Tongon was back at full capacity at the time of the announcement and Randgold said the downtime had been used for plant upgrades. 

 

However, management also conceded the mine looked likely to miss its 290,000oz guidance figure. The steady group production guidance therefore suggests either only a small miss at Tongon, outperformance elsewhere in the portfolio, or a combination of both.

 

Numis said the problems at Tongon were "more serious than initially expected as it has spread beyond the contract miner", while challenges in the DRC centred on a gold royalty increase from 3.5% to 4.5%, a minimum local-ownership requirement, a windfall profits tax and, "most controversially" - and ironically given the name - the removal of the ‘fiscal stability agreement' between Randgold and the government.

 

Meanwhile, Numis was also concerned by the "security risk" in Mali, where two UN peacekeepers were killed and 10 more wounded at the beginning of April in a mortar attack in the northern region of Kidal. This was followed by the death of 14 alleged terrorists in the central region of Mopti. 

 

Though citing this as troubling, in the same breath the firm acknowledged Randgold's operations were in the "more peaceful southwest of the country". The Morila mine, which is preparing for closure and so is presumably of less significance in the Numis calculations, is also in the south.

 

The market, in general, seems to have backed Randgold chief executive Mark Bristow, a champion of mining in Africa, to overcome the issues in Côte d'Ivoire and seems relatively unperturbed by disruption in wider Mali. 

 

The problems in the DRC, however, have taken their toll. The Randgold share price was rocked as news of the changes hit headlines early this year and it has failed to recover significantly in light of multiple failed attempts by high-powered mining delegations - companies in these missions have included Ivanhoe Mines, Glencore, MMG, Zijin Mining, China Molybdenum and AnlgoGold Ashanti, as well as Randgold - to sway the government's position.

 

Randgold lost almost a quarter of its value in late January to early April, when it was trading at just over £5.50. Mid-this week it was trading around the level Numis has targeted for the miner.

 

Though a pragmatist, Bristow may feel slightly aggrieved at the harsh treatment. Having built the company over two decades into arguably the best-performing miner on the London bourse, he has made an art form of finding a path forward in difficult parts of Africa where countless others before (and after) him have failed. 

 

Followers of Randgold (a synonym for Bristow), therefore, may see the backlash as a buying opportunity.