AFRICAN Gold is set to become a "significant gold producer", according to chairman, Dr John Teeling. The reserve levels at the Inez and Beehive gold mines in Zimbabwe suggest that "much larger outputs are viable".

Dr Teeling, in his annual review to shareholders argues that the exploration potential is substantial. The first two months of its financial year April and May have been "good" with the Inez expansion project on target and with the development started at Beehive.

African Gold recorded a rise in pre-tax profit from £22,446 to £374,905 in the year to March 31st, 1996.

The profits were generated from the Inez mine which was purchased for £800,000 in July 1995.

The mine is generating an operating profit of more than 5100,000 a month based on a production rate of 500 ounces of gold a month.

Dr Tooling says that the development programme will double this rate by the end of 1996.