Randgold Closes In on Finding New Mines to Build as Profit Jumps

(Bloomberg) -- Randgold Resources Ltd., one of Africa's top gold producers, said it's closing in on picking new projects to develop as the company continues to focus on finding its own mines rather than buying up rivals.

“The way people make money in the gold industry is to find your own mines and build them. It's better than any M&A,” Chief Executive Officer Mark Bristow said in an interview on Bloomberg TV. “We've got some very exciting projects in the Ivory Coast.”

Randgold is seeking to find three new projects over the next five years as part of the company's next growth phase after building its Kibali mine in the Democratic Republic of Congo. Bristow said the producer is getting closer to being able to develop its Massawa project in Senegal into a mine.

The company's second-quarter profit surged 71 percent to $84 million, it said earlier Thursday. Gold production for the three months to June 30 rose 21 percent from a year earlier to 341,316 ounces, while cash costs fell 21 percent. Full-year output will be toward the top end of its guidance of 1.25 million ounces to 1.3 million ounces, it said.

Randgold shares climbed as much as 4.7 percent, the most in three months, and were up 4.2 percent by 8:16 a.m. in London. The stock has gained 14 percent this year.

The firm said its cash pile has increased to $572.8 million. Bristow said Randgold will keep $500 million on the balance sheet to develop new mines and return the rest to shareholders.

--With assistance from Manus Cranny and Anna Edwards

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

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin, Liezel Hill