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Company: AngloGold Ashanti (AU)
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  Ashanti hit by hedge position and rising costs

AngloGold Ashanti has been reducing its hedge book since 2001, but at 31 December 2007, the marked-to-market value of all its hedge transactions comprising its aggregate hedge positions was negative USD 4.27bn.

This highly negative position was a principal driver of AngloGold Ashanti's announcement in May of a capital issue, still underway, to raise some USD 1.7bn by the issue of 71m new shares at ZAR 194.00 per share. The offer closes at 12:00 South African time on Friday, 4 July.

While the news of AngloGold Ashanti's capital issue was readily received by investors, to the extent that the proposed number of new shares was increased slightly, the fundamental focus has never really moved away from the deadly cocktail of rising costs and falling yields on the South African mines.

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