Randgold Resources has proposed to double its dividend after it reported record profits driven by increased production.

The company led the FTSE 100 in early trading on the news that profit soared 259 per cent to US$433.4 million (£274 million) in 2011, as production was up at all its operating complexes.

Meanwhile, profit in the fourth quarter jumped 323 per cent to US$ 136.2 million (£86.1 million) compared to the same period in 2010, and was also higher than its annual profit in any preceding year.

The board confirmed that it was proposing an annual dividend of 40 cents per share, up 100 per cent on 2010.

According to a statement, production rose 58 per cent for the year to 696,023 ounces, boosted by contributions from the Loulo complex in Mali, Tongon in Cote d’Ivoire and the Morila joint venture, also in Mali.

Chief executive Mark Bristow said the company was forecasting growth in production in each of the next five years, with group production for 2012 estimated to be 825,000 to 865,000 ounces.

Bristow commented, ‘Randgold’s long-term strategy of building sustainably profitable gold mining businesses through discovery and development continues to pay off.

‘In 2011, we benefited from our investment in growth in previous years, just as the development work we are doing now will reward our stakeholders in years to come.’

The company said it expects total capital expenditure to remain high this year at around US$600 million (£379.4 million) as it invests in the anticipated construction at the Kibali project in the Democratic Republic of Congo.

Shares in Randgold were up 3.18 per cent at 7.635p at 10.21am.