Accra, May 5, GNA - AngloGold Ashanti, the world's largest gold producer is to go ahead with its programme of hedging 40 per cent of its production, since its merger with Ashanti is finalised. AngloGold originally thought out the hedging programme, which will be done over the next five years, weeks to the coming into force of the merger with Ghana's Ashanti Goldfields Company.
This puts the company's current forward sales of gold sitting between 28 and 29 per cent, adding that, it (Anglogold) aims was to return to this figure once the merger had occurred.
Richard Duffy, an Executive Officer of AngloGold recently said at the Denver Gold Group's European Gold Forum that, "We would seek to manage that back down below the 30 per cent. We will look at opportunities to restructure that book, where it makes sense on acquisitions."
The Gold Forum is an event where all gold producers and associated industries meet to evaluate the performance of the industry and plot forward linkages.
Duffy however, said the company would not create any new hedges but would continue to maintain its current forward sales as a risk management tool.
"We have not put any new hedges in place as we do not think that makes sense in the current market. We are reducing it and that does not mean eliminating it."
Ghana's former Ashanti Goldfields Company lost significantly through hedging some five years ago, but managed to weave through by engaging astute management practices.
Meanwhile, it is reported that Barrick, the world's third largest miner lost 32.4 million dollars in potential first quarter revenue by decreasing its hedge book over the same period. May 5, 2004.