Glittering 55% profit up for Shandong gold

Shandong Gold Mining Co, China's second-largest publicly traded gold miner, has reported that 2007 profit surged 55 percent as the price of the precious metal gained and production increased.

Net income rose to 368 million yuan (US$52 million), or 1.21 yuan a share, from a restated 238 million yuan, or 0.78 yuan a share, the Jinan City-based company told the Shanghai Stock Exchange on Saturday. It predicted a gain of more than 50 percent on January 30, according to Bloomberg News.

Gold has risen 40 percent in the past year as a weaker dollar increased the precious metal's appeal as an alternative investment and an inflation hedge. Bullion for immediate delivery reached a record US$1,032.70 an ounce on March 17, and closed at US$931.05 an ounce last Friday.

"Profit growth this year will be more remarkable after the company acquired mine assets from its parent last December," Le Yukun, an analyst at BOC International (China) Ltd, said in Shanghai before the earnings statement.

Shandong Gold bought five mines, which will help it more than double output this year.

Shandong Gold was flat to close at 151 yuan on Friday. The shares are down 11 percent this year in Shanghai trading, compared with the 27-percent decline in the benchmark CSI 300 Index.