AngloGold Ashanti (NYSE:AU) Production Increases, Earnings Raised

Having beat Barclays' (NYSE:BCS) expectations for their latest quarter, AngloGold Ashanti (NYSE:AU) had their price target and earnings raised by Barclays going forward.

"After a busy quarter in which AngloGold Ashanti issued $1.6 billion in debt and equity and began taking out the remainder of its hedgebook, the company reported results that beat our expectations. With production slightly above our forecast and a realized gold price well ahead of our assumption, AngloGold reported EPS of $0.14 and adjusted 'headline' EPS of -$3.21 (including $1.5 billion in hedgebook buy-back costs) or $0.82 excluding the hedgebook impact. We remove an $84 million application of prior period tax credits and approximate operating earnings at $0.59/share."

The earnings per share ranged for the full year 2010 was raised from $1.15 to $1.60, and for 2011 from $1.50 to $1.95.

Barclays raised their price target on AngloGold from $39 to $42. The gold miner closed Monday at $48.69, losing $0.41, or 0.84 percent. They maintained an "Equalweight" rating on them.

AngloGold (NYSE:AU) No Longer Has Hedge Book

With gold prices expected to continue climbing for years into the future, a growing number of gold miners have been eliminating their hedge books. AngloGold Ashanti (NYSE:AU) has now completed the process.

Over the last three years, Anglogold said they've created close to $40 billion in value for their shareholders, at a cost of closing the hedge book contracts of $2.63 billion.

The buy-back price on average was close to $1,300 an ounce for the final tranche of restructuring their hedge.

Gold prices pulled back today, pressuring the share price of Anglogold, where they dropped to $45.96, falling $1.56, or 3.28 percent, as of 1:41 PM EDT.

Barclays (NYSE:BCS) Sees Gold Remaining Strong in Fourth Quarter

With fundamentals expected to remain in place, Barclays (NYSE:BCS) believes gold will continue to perform strongly in the fourth quarter.

Barclays said “we maintain our view for the fourth quarter of this year to be the strongest quarter on record yet for gold prices, with downside corrections finding support from the seasonally strong period for fabrication demand with the forthcoming wedding and festival season in key gold-consuming countries.”

Several reasons were cited by the financial firm, including expected continuation of quantitative easing, ongoing low interest rates, and gold miners continuing to abandon their hedge books.

Gold broke all-time records several times last week, and some are saying it could hit $1,300 this week if quantitative easing is mentioned by the Federal Reserve.

AngloGold (NYSE:AU) Closing Hedge Book in Early 2011

AngloGold Ashanti (NYSE:AU) is poised to shut down its hedge book in the early part of 2011, joining other gold miners whose confidence in the support underlying gold prices will continue on for some time into the future.

The giant gold miner will offer convertible notes and common shares as the choices to raise the capital to eliminate their hedging position.

The offering of mandatory convertible notes and equities will be launched at the same time.

Approximately 16 million new ordinary shares will be issued by AngloGold, along with mandatory convertible subordinated bonds, which will be due 2013.

About $1.4 billion will be raised from the sales, which will be used not only to close Anglo's hedge book, but also to fund projects and maintain their balance sheet.

Major competitor Barrick Gold (NYSE:ABX) closed their hedge book about a year ago.