Johannesburg | Thursday
SOUTH Africa’s largest gold producer AngloGold said on Wednesday it was ”aggressively” running down its hedge book because of market conditions and a strong bullion price.
”We’ve continued to manage our hedge book aggressively and we are taking out the weaker positions in the hedgebook right now so that going forward we don’t have a long period when we will be receiving lower prices, or incurring an opportunity loss,” said AngloGold Financial Director Jonathan Best.
”We haven’t changed our hedging policy per se, but market conditions at the moment dictate that we are running down our hedge book and we have been for a little while,” Best told Reuters.
The bullion price bounced to $300,60 a troy ounce from a London close of $298.40/298.90 and $301.40 shortly after the news.
The gold price has also been buoyed by investors seeking a safe haven for their cash after Israel vowed to continue its military offensive after another suicide attack.
AngloGold closed 1,7-million ounces in its hedge book in the last quarter of 2001, leaving it with a hedge book of 14,6-million ounces.
Best said more details of AngloGold’s hedging position would be unveiled at its March quarter results on April 30.
”We are aggressively running down our hedge book and the reason for that is that we are more bullish on the gold price and because U.S. interest rates are low,” he added.
AngloGold has forecast it will produce 5,8-million ounces of gold in 2002 at a total cash cost of $154 an ounce and will have capital expenditure in the year of $268 million.