07:10 AU AngloGold Ashanti eliminates hedge book ($47.52)

AU has completed the elimination of its gold hedge book, providing the company and its shareholders with full exposure to the prevailing gold price. The company will now sell the gold it produces at market prices and therefore expects to enhance cash flow and profit margins as a result of removing hedge contracts. The cost of scheduled hedge book maturities during Q3 of 2010 was approximately $98M. The additional cost of closing out all future hedge contracts amounted to approximately $2.63B, representing an average buy-back price of $1,300 per ounce for this final tranche of the hedge restructure. The cost will be reflected in adjusted headline earnings for the last two quarters of 2010. This final phase of hedge restructuring has been funded with proceeds from the issue of new equity and the mandatory convertible bonds completed in September, as well as cash from internal sources and debt facilities.