Randgold profit rises

London - Randgold Resources, which mines gold in three African countries, reported a 14% rise in first-quarter profit as higher output more than compensated for a drop in gold prices.

Randgold, which has mines in Mali, Ivory Coast and the Democratic Republic of Congo, said profit from mining for the quarter ended March 31 rose to $171.0m from $150.4m a year earlier.

Randgold, which is also developing a deposit in Senegal, has proven more resilient than most of its peers to a falling gold price, having calculated its reserves using a $1 000 benchmark even as gold soared to $1 900 an ounce in recent years.

The company is forecasting a 25-30% increase in gold production for the full year, on top of a 15% increase in 2013.

"We are very comfortable about keeping our guidance both on production and on costs," Chief Executive Mark Bristow told Reuters on Thursday.

Of the 18 analysts covering Randgold, seven have a "buy" rating on the stock and three have a "strong buy" rating, according to Thomson Reuters data. Eight analysts have a "hold" on the stock and none recommend selling it.

Randgold produced 283 763 ounces of gold in the first quarter, up from 199 013 ounces a year earlier, an increase attributable largely to the start of commercial production at the Kibali mine in the Democratic Republic of Congo in October.

"We expect to see an ongoing lift in production through the course of the year as average grades improve and Kibali is bedded down," said Investec Securities analyst Hunter Hillcoat, who has a "hold" rating on the stock.

Randgold's higher output more than offset a 21% decline in the average gold price received, which fell to $1 296 per ounce for the quarter.

Total cash costs per ounce fell 19%, helped by production at Kibali and significantly higher grades and recovery at the Loulo-Gounkoto complex in Mali, Randgold said.

The company's shares fell marginally in early trading on Thursday. They were down 0.5% at 4679 pence at 08:45 GMT on the London Stock Exchange.