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 borrowingThe 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-backVenkatakrishnan 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.