LONDON, May 11 (Reuters) - Ghanaian mining company Ashanti Goldfields Co Ltd reported a 68 percent fall in first quarter profits on Thursday, reflecting a lower realised gold price than a year ago.

Earnings fell to $6.9 million, or six cents a share, from $21.5 million, or 20 cents, a year earlier as the average gold price obtained by the firm slid to $345 an ounce from $380.

Output at Africa's third biggest gold producer, which came close to collapse last year because of huge derivative losses, increased by four percent to 417,849 ounces.

Ashanti's managing director for investor relations, Kweku Awotwi, said it would be offsetting cutbacks elsewhere in Ghana by acquiring the Teberebie mine in conjunction with South Africa's Gold Fields Ltd .

"We are close to making an announcement -- in the next few days one will be made," he told Reuters.

One person familiar with the situation said the two firms would be paying less than $50 million for the Ghanaian mine, which is being acquired from the Pioneer Group . Gold Fields said last week that it expected to acquire Teberebie with Ashanti for a "very, very competitive price."

Ashanti reported progress with its promising Geita gold mine in Tanzania, a 50 percent stake in which is being sold to AngloGold of South Africa.

Commissioning of Geita is now expected to start in late May with first production from the 500,000-million-ounce-a-year mine by the end of the second quarter, some months ahead of the original schedule.

Ashanti is seeking to reinvent itself after overhauling its board and securing refinancing following the financial crisis which was sparked by a spike up in gold prices last autumn which flipped its gold hedging book into a loss of $570 million.

The hedging portfolio is now being restructured and stood at a negative $146 million at end-March. But investors have so far stayed away, leaving the shares languishing at $2 each -- one tenth the level at which they were floated in 1994.