By James Macharia

JOHANNESBURG (Reuters) - AngloGold Ashanti's chief executive said on Tuesday 6 October the world's No. 3 gold producer plans to expand output through exploration, a strategy that has so far given his company "more bang for its buck".

Aerial view of the AngloGold Ashanti mine in Sadiola, Mali (Photo: AngloGold Ashanti)

In an interview with Reuters, AngloGold's Chief Executive Mark Cutifani forecast the dollar price of gold would rise, but a strong rand was eroding much of the gains.

He forecast gold would trade between $950 to $1,100 an ounce in the next year, but could shoot beyond $1,100 if the U.S. economy struggles and investment demand for the metal rose.

Cutifani said although electricity costs and new wage settlements had put pressure on the company's bottom line, the group had no plans to lay off workers to save on costs and the company was cutting back on power consumption.

On production, Cutifani said AngloGold aimed to produce up to 6 million ounces a year after five to seven years -- from 4.98 million ounces in 2008 -- largely through improving its mines and expanding through exploration.

"We are very careful in looking at our exploration options, we are very active in relatively low cost, but high potential opportunities that give us the best bang for our buck, while sticking to our knitting," he said.

"You've got to try to keep your entry price down, be quick, be lateral and get out quickly if it's not working out," he said, adding that AngloGold was way ahead of its peers in seeking out new high potential mines through exploration.

AngloGold plans to scour seabeds for gold jointly with De Beers, the world's biggest diamond producer, which Cutifani said was part of the group's strategy of "thinking outside the box".

The gold producer is also planning to develop its La Colosa project in Colombia, and in July, AngloGold teamed up with African miner Randgold Resources Ltd to buy Moto Goldmines, which owns a project in the mineral-rich Democratic Republic of Congo.

In terms of costs, Cutifani said the company would report costs above $500 an ounce for the last quarter, although the long-term average stayed at about $450 an ounce.