By Alex MacDonald

LONDON--Randgold Resources Ltd (GOLD) has partnered with South Africa-based AngloGold Ashanti Ltd (ANG.JO) to create a joint venture to rehabilitate the latter's Obuasi gold mine in Ghana, the West African gold producer said Wednesday.

Under the terms of the agreement, Randgold will lead a plan to rebuild Obuasi into a viable mining business. No financial terms were disclosed.

Obuasi, located in the Ashanti region of Ghana, 320 kilometers northwest of the capital Accra, had 5.29 million gold ounces of reserves at 6.70 grams of gold per ton of rock as of the end of last year. Obuasi is a relatively high cost gold mine that produced 243,000 ounces of gold last year at an all-in sustaining cost of $1,374 a troy ounce and an operating cash cost of $1,086 a troy ounce.

Gold miners have been restructuring their operations to compete in the lower gold price environment. Even Randgold Resources, already a relatively low cost gold producer, last month said it was developing plans to restructure its business in order to generate a profit based on a break-even gold price of $800 an ounce. Gold was trading at $1,122 a troy ounce on Wednesday after having hit a five year low in July.

Randgold and AngloGold Ashanti are already partners in the development of the $2.5 billion Congolese Kibali gold mine. In last year's first full year of production, the mine produced 526,627 ounces of gold at a total cash cost of $573 an ounce and is forecast to produce even more gold this year. AngloGold and Randgold each own a 45% stake in the mine while the Congoelse state-owned SOKIMO owns the remaining 10% stake.

Randgold said that AngloGold Ashanti already has plans underway since 2012 to transform Obuasi into a modern mechanized mine.

Write to Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

September 16, 2015 12:25 ET (16:25 GMT)

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