Randgold quarterly profit disappoints

By Julie Crust

LONDON (Reuters) - Gold miner Randgold Resources (RRS.L) posted higher output but lower-than-expected profit in the third quarter on rising unit costs, but said it would fast-track its Gounkoto project to tap its "spectacular" grades.

Randgold's gold production rose to 118,925 ounces from 101,856 ounces, but total cash costs grew to $573 (343.46 pounds) an ounce, partly due to higher costs at its flagship Loulo project in Mali on a slower-than-expected ramp-up from the Yalea development.

The company said separately three workers were killed in an accident at Loulo on Monday.

The company's shares were down 5.1 percent at 4,535 pence at 11:11 a.m., hit also as gold prices eased from a record $1,110.85 an ounce on Monday.

The only pure gold producer in the FTSE 100 index swung to a third-quarter profit of $13.6 million from a loss of $684,000 a year ago, though its profits dropped 39 percent from the second quarter.

"These disappointing earnings are the result of rising costs, due mainly to ongoing difficulties with the Yalea underground development at the Loulo project in Mali," said Numis Securities in a note.

"We believe that Randgold is currently overvalued in relation to its operational risks and established production levels," it said.

Randgold said it would accelerate its Gounkoto project, 25 kilometres south of Loulo, and planned to complete a pre-feasibility study by the end of the first quarter of 2010.