UPDATE 2-Randgold shrugs off Mali unrest to deliver record output
* Q2 production up 14 pct to 210,534 ounces
* Profit rises 10 pct to $142 mln
* Continues to see no impact from Mali unrest
* Sticks to 825,000-865,000 oz gold production target
* Shares up 2.7 pct
By Sarah Young
LONDON, Aug 9 (Reuters) - Miner Randgold Resources eased market worries over the impact of a coup in Mali, posting record production from its key mine in the country, and higher group profit, distinguishing itself in a sector hit by weaker prices and rising costs.
The West-Africa focused gold producer grew output 14 percent to 210,534 ounces in the three months to the end of June, above some analyst estimates and regardless of the ongoing unrest in Mali, where its flagship Loulo-Gounkoto mine is located and where production soared to record highs.
Profits rose 10 percent to $142 million in the period, beating the $128 million it made last year, driven by the higher output and in spite of a 6 percent decrease in the average gold price the company received.
Islamist militant groups control about two-thirds of Mali after hijacking a secular rebellion by Tuareg nationalists earlier this year.
Randgold, which asserted in May that the unstable political climate in Mali would not impact its operations, reiterated that it was sticking to the 2012 gold production target of 825,000-865,000 ounces it gave at the beginning of the year.
"I'm reasonably confident," said Chief Executive Mark Bristow in an interview, when asked how sure he was that the situation in Mali would not impact Randgold.
"We manage it all the time. We spend a lot of time with the various stakeholders."
Shares in the company rose 2.7 percent to 6,355 pence, putting it among the top climbers in Britain's bluechip index.
Bristow said that outside of Mali, where the company has operations in Cote d'Ivoire and the Democratic Republic of Congo, its projects were on track and added that the company was also casting its eye over possible acquisitions in west and central Africa.
"The junior sector is rotten. Times like this, when's there's so much stress in the market, it's wise to lift one's attention and look at opportunities," he said, adding that nothing was imminent.
Liberum analysts cited Gryphon, which has a development project in Burkina Faso, and Papillon in Mali as likely targets for Randgold.
Randgold stood out from some its mining peers by posting a drop in cash costs per ounce of 6 percent on a quarter-by-quarter basis, which contrasts with the stubbornly high costs with which the rest of the industry is grappling.
While Randgold's costs were up 6 percent year-on-year, Bristow said that the falling trend of the last quarter was likely to endure.
"For two years we've been guiding the market on the fact that we will reduce costs materially out to 2015 and it's driven on quality," he said.
"The industry's cost problem is that it's under pressure grade-wise and we don't experience that pressure. We're mining better and higher-grade ore bodies, we're mining below our reserve grade, so we've got quite a bit of headroom to improve our costs."
Randgold, which started mining operations at its Kibali gold project in the DRC in June, said the lower cost base was a result of higher production thanks to more efficient mining as the Loulo-Gounkoto ore was of a higher grade.
"We expect the grade-driven production growth to allow Randgold to better mitigate sector wide cost pressures over the medium term and marks the company as holding a superior position in the sector," Canaccord analysts said.
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