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Randgold Sees 2011 Gold Output Rising 54% on Expansion in Mali

Aug. 5 (Bloomberg) -- Randgold Resources Ltd., a producer of the metal in West Africa, plans to boost gold output as much as 54 percent next year as it expands in Mali and Ivory Coast.

Randgold expects production attributable to the company of 736,000 ounces in 2011, bolstered by its new Tongon mine in Ivory Coast and as it expands its Mali operations, Chief Executive Officer Mark Bristow said in an interview.

“It will be a significant step up next year,” Bristow said in London today. “We’re a growth company and we’re pioneering underground mining in West Africa.”

Randgold is expanding its first underground mine at Loulo in Mali to access higher-grade ore found deep under the surface and plans to start output at Tongon this year. The company is also developing a mine in Senegal and last year agreed with South Africa’s AngloGold Ashanti Ltd. to acquire Moto Goldmines Ltd., which has a deposit in the Democratic Republic of Congo.

Randgold cut its full-year output guidance at Loulo this week after power outages and said the company’s annual production would be within 5 percent of its 477,000 ounce target. The shortfall at Loulo will be partly countered by output at Tongon this year that may exceed its 75,000 ounce target by 10 percent, Bristow said.

The company slid 215 pence, or 3.8 percent, to 5,500 pence by 8:36 a.m. in London trading after second-quarter earnings.

Randgold said net income more than doubled to $34.4 million from a year earlier as gold prices increased, it profited from a sale of shares in Volta Resources Inc. and wrote-back an earlier provision. Sales were little changed at $102.6 million.

Gold output fell 23 percent to 93,880 attributable ounces. Gold for immediate delivery averaged $1,196.53 in the period compared with $922.13 in the corresponding three months of 2009.

To contact the reporter on this story: Thomas Biesheuvel in London tbiesheuvel@bloomberg.net.

To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net

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