Higher gold prices have allowed the world's third biggest gold producer, AngloGold Ashanti Ltd, to revive two South African projects that would deepen mines and exploit 4.1 million more ounces of bullion, a senior official said.

The projects at Mponeng and Moab Khotsong mines are expected to cost about 3.4 billion rand and should go to the board next year, said David Diering, executive officer for business planning in Africa.

"The projects that we're dusting off now with these higher gold prices are projects that are going to go from 3.5 kilometres to just above 4 kilometres," he told Reuters late on Tuesday.

"Those two will probably will go to the board next year, in 2007, for final approval."

The projects had been removed from AngloGold's reserves last year due to low prices, but a rally in gold prices since then and a weakening of the rand had made them viable again.

The domestic gold price has shot up by around 50 percent over the past 12 months to around 140,000 rand per kg.

"At least one of them will be back in reserves this year and the other hopefully next year," Diering said.

"Both of these were at feasibility level last year, and we took them out. We're back at pre-feasiblity level because we really had to re-engineer these things from scratch."

SMALLER MOAB PROJECT

One project is at AngloGold's new Moab Khotsong mine, which launched commercial output this year and is in the process of ramping up production.

The new project has been redesigned as a smaller and less expensive one, targeting 1.8 million ounces instead of the previous 4 million ounces, Diering said.

"At Moab it is a fundamentally different approach...it's a smaller project with smaller capital this time."

The project -- named Zaaiplaats -- was expected to cost around 1.6 billion rand and would extend the life of the mine by around six to seven years.

The Mponeng project would deepen the mine from 3.5 km to just above 4 km and was expected to cost around 1.8 billion rand, he said. It would deliver around 2.3 million ounces and also extend that mine by six to seven years.

Feasibility work discovered that the incline of the Mponeng expansion project would be better at 7 degrees instead of the planned 9 degrees, allowing access to higher grades earlier.

"We took it out last year because of the economics and we have re-engineered that project and with the price we're working on, we think it's a goer."

Another deepening project at the nearby Tau Tona mine was approved two years ago and shaft sinking was due to start next year.

"There's about 1.2 billion rand approved for that project and it will deliver 2.6 million ounces," Diering said.

In May AngloGold posted a 10 percent fall in first quarter production to 1.34 million ounces.

Mining giant Anglo American Plc holds a 41.8 percent stake in South Africa's AngloGold after surrendering control by selling part of its 51 percent holding in April.