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AngloGold hustles to close gold hedges

Section: Daily Dispatches

AngloGold Plans Share, Convertible Bond Sales to Help It End Gold Hedging

By Simon Casey
Bloomberg News
Tuesday, September 14, 2010

LONDON -- AngloGold Ashanti Ltd., Africa's biggest gold producer, plans to sell 15.8 million new shares and offer bonds that convert into the same number of American depositary receipts to fund an end to its gold hedges.

There will be over-allotment options to sell an additional 2.37 million shares and the same number of convertible bonds, the Johannesburg-based company said today in a statement. The company said it will use the proceeds along with cash on hand and credit facilities to "effectively eliminate its gold hedging position."

The company's ADRs, each representing one ordinary share, rose $2.13, or 4.8 percent, to close at $46.72 in New York trading before the bond and stock sales were announced.

AngloGold, in which hedge-fund firm Paulson & Co. holds a 12 percent stake, is among gold-mining companies reducing forward sales of the metal to take advantage of record prices. Producers cut hedges by about 780,000 ounces to 6.75 million ounces in the first quarter, research company GFMS Ltd. said in a June report.

Gold futures for December delivery rose to a record $1,276.50 an ounce on the Comex in New York today.

UBS AG, Morgan Stanley, Citigroup Inc., and Deutsche Bank AG are working for AngloGold on the sales.


Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

For complete information on Sona Resources Corp. please visit:

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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.

For Prophecy's complete press release about its production plans, please visit: