March 16, 2011 / 9:46 PM / 7 years ago

UPDATE 1-Semafo Q4 profit rises on higher production

* Q4 eps $0.09 VS $0.04 yr ago

* Q4 sales up 18 pct to $86.4 mln

* Q4 gold production 61,500 ounces

March 16 (Reuters) - Gold miner Semafo Inc’s fourth-quarter profit more than doubled, boosted by a six percent increase in production.

For the fourth quarter, the Canadian company earned $27 million, or 9 cents a share, compared with $10.5 million, or 4 cents apiece, a year earlier.

Gold sales for the quarter rose 18 percent to $86.4 million.

Analysts, on average, were expecting the Montreal-based gold junior miner to earn 10 cents a share, on revenue of $86 million, according to Thomson Reuters I/B/E/S.

The company produced 61,500 ounces of gold in the quarter, up 6 percent from a year ago.

For 2011, the company has earmarked $30 million in exploration expenses at the Mana mine in Burkina Faso, from which it estimates about 72 percent of total annual production.

Semafo’s total proven and probable mineral reserves on Dec. 31, 2010 were 36.1 million tonnes at an average grade of 2.43 grams per ton (g/t) of gold, which is expected to yield 2.8 million ounces.

The company said these estimates do not include the new Yaho gold zone discovery at the Mana mine announced earlier this month.

Semafo, which began operations at Mana in 2008, produced 261,100 ounces of gold in 2010, with about 180,000 ounces coming in from the West African mine.

The company’s board also adopted a shareholders rights plan and said it intends to seek shareholder approval for the plan at its annual meeting on May 10.

The rights plan, commonly known as a “poison pill,” will be triggered if 20 percent of Semafo’s shares are acquired by a single entity, or if there is a hostile take-over bid.

Spot gold prices are still hovering around $1,400 per ounce, after touching a record high of $1,434 an ounce in February this year.

Shares of Saint-Laurent, Quebec-based Semafo, which have lost nearly a fourth of their value this year, closed at C$8.52 on Wednesday on the Toronto Stock Exchange. (Reporting by Abhiram Nandakumar; Editing by Prem Udayabhanu)

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