Doesn't look like Anglo American wants anything to do with Gold at this time...or they just don't want to use highly hedged Anglo Ashanti as their gold investment !!

Anglo to reduce stake in AngloGold
Sherilee Bridge
Thu, 21 Feb 2008

Anglo American, the world's second-largest resources group, on Wednesday confirmed its intentions to further reduce its stake in AngloGold Ashanti.

Cynthia Carroll, CEO of Anglo American, said the group's shareholding in AngloGold Ashanti stood at 16.6 percent at end December.

The group continues to sell down its stake in the gold producer, with the largest move in October last year when it sold about half its stake, thereby reducing its shareholding from 41.6 percent to 17.3 percent.

It was October two years before that Anglo first said it would reduce its shareholding in AngloGold Ashanti.

It followed up this announcement with the sale of US$1-billion worth of shares in April 2006, when it cut its shareholding to 41.8 percent from 51 percent.

AngloGold Ashanti was formed in 1998 through the consolidation of Anglo American's gold interests, at the time held through eight separately listed South African companies.

At the time AngloGold Ashanti had an almost exclusively South African production base and had been transformed through a range of asset-acquiring transactions, including its merger with African mining producer Ashanti Gold Fields.

Since 1998, in the context of AngloGold Ashanti's acquisition strategy, Anglo American has had to buy shares in the market to keep its equity stake in AngloGold Ashanti at above the 50 percent level and thereby maintain AngloGold Ashanti as a subsidiary.

The reasons underlying the resources giant's decision to reduce and ultimately exit its gold investment related to the higher relative valuations attributable to pure-play gold companies, rather than as part of a diversified mining group.

This share overhang has meant that the AngloGold Ashanti share price has traded at a discount to its NAV for close on a decade.

But the possibility of AngloGold's exit may result in a rerating of the share.

Carroll said the group would continue to explore all available options going forward but the gold producer can be confident that its former parent would conclude its association gracefully by selling the remaining shares in an orderly manner.

The shares are also likely to be sold into the market rather than to a buyer.

Anglo American, which reported an 18 percent increase in its full year net profit to $7.3-billion for the year to end December 2007, said gold's contribution to the group's total operating profit declined 57 percent to $202-million.

The group accounted for AngloGold Ashanti as an associate until October last year, and it now presented in the group's financial statements as a discontinued operation.

At 11.37pm shares in Anglo American were up 1.08 percent or 4.10 rand at 475 rand while shares in AngloGold Ashanti were trading 2.63 percent or seven rand higher at 273 rand on the JSE.