Randgold Resources to increase production 50%

Randgold Resources, the gold focused mining and exploration business, plans to increase annual gold production 50% by end of 2011.

The company’s current annual output stands at of 400,000 ounces.

Randgold will begin production at its Tongon project, in Cote d’Ivoire, towards end of 2010 and will also increase grades at its Loulo mine, in Mali.

Construction at Tongon will begin at the end of 2008 and the company has tripled its total resource at the project from 1.4 million ounces to 4.4 million.

Around 2.8 million of this total is mineable at a gold price of $525 ounce and the balance at $800 ounce.

According to Mark Bristow, Randgold’s chief executive, the rising costs affecting the entire gold mining sector will be offset through both increased production and a grade increase at Loulo.

Randgold’s total cash cost increase from $32.5 million in the September quarter 2006 to $38.2 million in September quarter 2007.

This rise reflects fuel costs, the dollar/euro exchange rate and mining royalties, but is in line with the company’s forecast of a 10% to 15% increase.

Mr Bristow expects a shortage of new gold supply to result in a significantly higher price of the metal, taking into account growing demand from the jewellery sector, which has continued despite the buoyant gold price.

Randgold Resources recorded a 69% increase in net profit, to $11.5 million, for the three months to the end of September 2007, compared with quarter ending 30th June.