Ashanti, the Ghana gold miner, suprised the market with better than expected interim figures, despite extremes of weather that wreaked havoc with production at the start of the year.
Pre-tax profits were pounds 32.26m, up from pounds 29.61m for the six months to March 1995.
Ashanti, traditionally a low-cost producer, suffered from a drought around its main mining operation at Obusi. This inflated costs and slowed production, which fell by 15,000 ounces in February, the worst month. The company is now building a dam and reservoir to limit the impact of weather on both its surface and underground mining.
But analysts now consider that Ashanti's target of mining one million ounces by the end of the year is unreachable.
Mark Keatley, chief financial officer, was bullish aboutprospects as the company had sold hedge contracts with fixed prices to protect it from gold price fluctuations, making pounds 4.36m profit from the deal. He also predicted that the gold price would range from $400-$420 per ounce during the next two years, compared with the current range of $380-$400.
The company is keen to expand outside Ghana and has formed an alliance with the Canadian-registered International Africa Mining Gold Corp.
The two firms have pooled a portfolio of exploration interests, including Senegal's Bambadji region, thought likely to produce gold within the next two to three years.
The company will also explore further prospects in Angola and Mozambique in an effort to reach the long-term target that one-third of output should come from outside Ghana by the end of the century.