Mark Bristow, the main executive of African miner Randgold Resources Ltd., has been an outspoken critic of his gold industry peers for a long time. He blames them, with lots of justification, for wasting the very best gold bull market ever by not generating any real value per share. He explained the need for the industry’s impairments is worth a lot more than its combined market cap today.
He believes the issue was short-term thinking, which caused companies to spend recklessly and load on debt towards the top of the gold market on the misguided assumption that prices would go up forever.
“If you invest at the top and then try to survive at the end, you won’t create much value for shareholders,” Bristow said inside a breakfast presentation to bankers, analysts and media on Wednesday.
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But he said the issue of short termism isn’t restricted to the businesses themselves. He criticized the financial sector for firing so many mining analysts once the commodity boom ended. A modest recovery has become underway in gold, but buy-side investors looking at the sector cash less analyst research to sift through compared to what they did a few years ago.
“This happens when we want analysts,” Bristow said.
Randgold was one of the few solid performers within the gold industry throughout the downturn. Bristow’s presentation focused on the business’s solid operating performance and exploration upside in West Africa and the Democratic Republic of Congo (DRC). He noted the company has operated smoothly despite a coup in Mali, civil war in Ivory Coast and instability within the DRC.
“We’ve been through some hectic situations,” he acknowledged.
