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South African-based miner AngloGold Ashanti has put mines up for sale in a move to cut debt after shareholders balked at a $2.1 billion share sale in September.

The world’s third-largest gold producer has 20 gold mining operations in 10 countries, as well as several exploration programmes in both the established and new gold producing regions of the world.

Cutting borrowing

The company plans to cut borrowing through ‘self-help measures’, such as reducing operating expenses and increasing output, AngloGold CEO Srinivasan Venkatakrishnan told Bloomberg on Monday.

“We may also consider a sale or joint venture of an operating asset for value,” said AngloGold’s CEO. “People ask us ‘what do you mean for value?’ It basically means the shop isn’t open for bargain hunters.”

Strategic fight-back

Venkatakrishnan is beginning a strategic fight-back after investors rejected a plan to split AngloGold’s South African and international mines, a move that would have required the company to raise $2.1 billion, or a third of its then market value.

He wants to reduce net debt by $1 billion, a third of the total, over the next three years.

AngloGold’s American Depositary Receipts rose 22% to $10.12 at the close in New York.

Earlier they posted the biggest intraday gain since 21 November 2008. In Johannesburg, the shares jumped 12% to close at R104.37.

True Potential

Before today’s rebound, AngloGold had declined 45% since it announced the plan to split on 10 September.

Gold has since dropped 6.6% to $1.169.80 an ounce as investor demand for safe-haven assets has weakened with signs of an improving US economy and the prospect of tighter monetary policy.

AngloGold on Monday announced its half-year earnings reporting a lift in its gold output and a reduction in costs as its South Africa operations.

The miners’ headline earnings were $2 million in the three months ended 30 September from a loss of $4 million in the previous quarter this year.

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