AngloGold Ashanti holds world’s largest hedge book

   Johannesburg, Mar 16 (I-Net Bridge) - South African-based gold producer AngloGold Ashanti (ANG) is the holder of the world’s largest hedge book after rival Barrick Gold closed out the remainder of its gold fixed price forward sales in the last quarter of last year.
    This is despite the strides the gold producer has made in slashing its hedge book since late 2007.
    According to a report by metal consultancy GFMS, which was jointly prepared with Societe Generale, Barrick Gold was the most active of the gold producers for the second consecutive quarter in the fourth quarter of 2009.
     Following a 2.50 million ounce (Moz) reduction in the third quarter, Barrick closed out the remainder of its fixed price gold forward sales contracts amounting to a de-hedge of 2.90 Moz in the fourth quarter of 2009.
    This left the company unhedged.
    The second largest cut came from AngloGold Ashanti, which continued its campaign to reduce and manage its remaining hedge book.
    AngloGold Ashanti’s reduction in the fourth quarter amounted to 0.44 Moz, which represented a reduction over and above the scheduled maturity profile of the company at end-September.
    The company now holds the largest hedge book, standing at a delta adjusted 3.49 Moz.
    But AngloGold Ashanti has promised that its de-hedging would continue.
    The company said last month that it was committed to seeking ways to increase its exposure to the gold price.
    AngloGold Ashanti CEO Mark Cutifani said the company would “continue to be opportunistic on this front”.
    Releasing its Global Hedge Book Analysis on Monday, GFMS said net producer de-hedging increased in the fourth quarter of 2009, with 4.00 Moz removed from the global hedge book.
    This means net de-hedging was recorded at 8.16 Moz for the full year and left the global book, at end-2009, standing at 7.58 Moz in delta-adjusted terms.
    But GFMS expects the volume of global gold de-hedging to fall in future, due to the greatly reduced size of the remaining global book.
    The marked-to-market liability of the producer book improved to negative US$2.9 billion in the fourth quarter, mainly due to Barrick’s forward sales elimination.
    Producers’ weighted average realised prices increased to US$1,047.63/oz, an increase of 13% over the previous quarter.
   
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