Randgold Resources Ltd., the owner of gold mines in West Africa, said a deposit in Senegal has exceeded expectations and may be one of its top discoveries.

The Massawa project is “a lot better” than the company’s Tongon deposit in Ivory Coast was at the same stage of development, said Chief Executive Officer Mark Bristow. Tongon, which is scheduled to begin output next year, contains 3 million ounces of reserves, which is the estimated amount of gold that can be mined profitably.

Massawa has “lots more potential” than Tongon, Bristow said in a telephone interview from Senegal yesterday. “We have made a discovery that runs the risk of being one of our best.”

Randgold is looking for additional production as mining at one its two Malian operations is due to end in the second quarter. Bristow said in February he had held talks about acquiring Moto Goldmines Ltd., which plans to develop the Democratic Republic of Congo’s largest gold mine.

“If it is as good as Tongon then that would be three world-class assets in excess of 3 million ounces each, which is a rare thing to find,” John McGloin, an analyst at Arbuthnot Securities Ltd. in London who has a “reduce” recommendation on the stock, said in a telephone interview.

Randgold, which is based Jersey, is carrying out drilling at Massawa and will announce details of the so-called initial inferred resource tomorrow, Bristow said. A so-called bankable feasibility study, which is usually required by investors before they fund development, is expected to be complete by the end of 2010, Bristow said. There’s a “very good” chance Massawa will produce gold by 2013, he added.

Project Conversion

“We have always had as our focus the minimum of 3 million ounces and there is every indication that this will be one of those projects,” Bristow said.

The Morila joint venture in Mali will be converted this quarter into a project that treats stockpiled raw material. Randgold also controls the Loulou mine in Mali.

Randgold produced 428,426 ounces of gold in 2008. Bristow forecasts output this year of 490,000 ounces.

The shares closed yesterday at 3,685 pence in London. They have advanced 25 percent this year, valuing the company at 2.83 billion pounds ($4.1 billion), compared with a 13 percent increase in the FTSE 350 Mining Index.

Gold, which gained 5.8 percent last year and traded at a record $1,032.70 an ounce in March 2008, has advanced this year on concern that inflation will accelerate following Federal Reserve plans to buy Treasury securities and mortgage bonds.

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