Randgold Resources hit by fire at mine in Ivory Coast

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Christmas Eve fire in the mill at Rangold Resources' Tongon mine will hit full-year gold production.

Gold miner Randgold Resources has cut its guidance for output at its Tongon mine in Ivory Coast after a fire at a processing plant.

The gold miner now expects full-year production of about 208,000 ounces, compared with analysts’ expectations of 230,000 ounces.

The fire started in the mill section of the plant on Christmas Eve during a planned maintenance shutdown. The fire has now been extinguished and there were no injuries.

Mark Bristow, chief executive of the FTSE 100 (FTSE: ^FTSE - news) group, said the full extent of the damage was still being assessed but the mills themselves had been unaffected. The mine has already started to make short term repairs including temporary relining of the various pieces of equipment whilst sourcing replacement parts.

Management aims to have both milling circuits operational again within ten days. Tongon is Randgold’s newest gold mine, starting production in 2010. Randgold owns 89px of Tongon and it operates the Loulo, Gounkoto and Morila mines in Mali.

Dmitry Kalachev, a mining analyst at broker Canaccord, said that he now expected Randgold’s total production for all of its African mines would be 908,000 punces cop,mpared with his earlier forecast of 954,000 ounces.

“Over the long term, we continue to see Randgold trading at a premium to peers given its asset quality, production growth, expected increase in grades, and management’s track record of delivering results against a difficult political backdrop,” Mr Kalachev said.

The shares rose 2p to £61.22 in morning trading.