Ashanti doubles profits, gold output up

LONDON, July 31 - African gold miner Ashanti Goldfields Co Ltd (NYSE:ASL) reported on Tuesday it had doubled its profits in the second quarter as it increased production, cut costs and felt the benefits of a higher spot gold price.

The Ghana-based miner doubled pre-tax profits on a year ago to $15.8 million for the three months to end-June.

Attributable earnings were $14.1 million for the quarter, up 57 percent on the first three months and more than 120 percent higher than in the same period a year ago.

That worked out to earnings per share of 12 U.S. cents for the quarter -- in line with forecasts, and compared to 6 cents last time.

Ashanti said it produced 437,043 ounces of gold in the quarter, up 10 percent on the previous three months and it said it cut its cash operating costs by seven percent from the first quarter to $181 per ounce.

It said it had significantly increased production at its Geita, Siguiri and Bibiani operations, but output was lower at the Obuasi mine because of the end of surface mining operations there and the closure of a treatment plant.

Ashanti, whose derivatives losses brought it to its knees in 1999, said it had cut its gross and net debt levels by $9.7 million over the quarter and its hedge book showed a positive amount of $76 million at the end of June, based on a gold price of $270 per ounce.