LONDON, July 31 (Reuters) - Africa-focused gold miner Randgold Resources Plc
said profit roughly doubled in the first half from a year ago, as higher
production and strong gold prices countered a weakening dollar and rising costs.
Net profit for the six months to the end of June rose to $38.4 million from
$19.6 million a year ago. Net profit of $20.2 million for the second quarter was
up 11 percent on the previous quarter and up 196 percent on the corresponding
quarter in 2007, Randgold said in a statement on Thursday.
Randgold Chief Executive Mark Bristow has said the group is relying on
organic growth and acquisitions to boost output, which will plateau in about
four years. It needs one new mine to lift it into the big league of gold
producers, he has said.
Randgold also said the latest drilling results from its recently announced
Massawa project in Senegal had confirmed this was a major discovery".
Group gold production increased 12 percent quarter-on-quarter to 115,598
ounces, Randgold said.
Total unit cash costs rose about 4 percent to $457 per ounce at the end of
June from the end of March, but are up 27 percent from the corresponding period
a year ago.
Gold sales for the half year increased 41 percent compared with a year ago,
as average gold prices rose to $833 an ounce in the half-year period, from $593
a year ago.
Steepening costs may soon become untenable, the company warned.
"Labour, steel, fuel, power, consumables, chemical reagents, explosives and
tyres form a relatively large part of the operating costs of any mining company,
and the price of all these items has increased considerably over the last three
years," Randgold said.
"The reality of the situation is that the mining companies cannot control
the current wave of price increases. The strategy therefore has had to shift to
the areas where management can control costs, namely consumption."
(Reporting by Hsu Chuang Khoo; Editing by David Holmes and Paul Bolding)
Keywords: RANDGOLD/
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