AngloGold chief sees gold at $2,200/oz by 2012(update)


CRIPPLE CREEK, Colo. (Reuters) - The chief executive of AngloGold Ashanti Ltd said he expects gold prices to hit $2,200 an ounce by next year and hinted the South African miner could boost its dividend.

The bullish forecast from CEO Mark Cutifani on Sunday comes as the uneasy economic landscape -- including an unstable euro, recently hamstrung Swiss franc and tenuous U.S. debt situation -- push investors into the precious metal.

"Given that we've already seen $1,900 (per ounce) gold, I don't think it's unreasonable to expect a price going up to $2,000, even $2,200," Cutifani told Reuters during a tour of AngloGold's Cripple Creek & Victor mine in Colorado.

"It's based on what's happening in the markets, the issues in the U.S. and Europe."

The price of gold has jumped about 40 percent in the past 12 months alone. Spot prices are currently trading around $1,800 an ounce.

"We're making cash at anything above $1,000 an ounce," Cutifani said. "So we're pretty well-positioned now."

Cutifani and other mining executives will meet in Colorado Springs, Colorado, this week for the annual Denver Gold Forum, one of the largest gatherings of its kind in the world.

Forecasts for the price of gold will be the talk of the town, but many investors also will be peppering CEOs with requests for higher dividend payouts.

While Johannesburg-based AngloGold raised its dividend last month to 12 cents per share, its dividend yield is roughly 45 percent of Barrick Gold's , the world's largest miner and a major competitor.

AngloGold had $839 million in cash at the end of June, funds that could help it lift its quarterly payout.

"We're already talking about the dividend policy with the board," Cutifani said. "When you've got the free cash flow that we've been generating lately, with our growth profile, it's obviously a front and center conversation.

"We'll have some comments at the next quarterly" earnings statement, set for November 9.

A higher dividend could help AngloGold combat a percolating thought amongst gold industry investors that it is better to buy gold exchange-traded funds (ETFs) rather than stocks in actual miners.

Buying ETFs let investors take part in gold's rise without being held back by strikes, power outages or other situations that can halt production, some have argued.

SPDR Gold Trust and ETFS Gold Trust are two large gold ETFs.

The SPDR Gold Trust, for instance, jumped 41 percent in value in the past 12 months compared with a 9 percent jump in shares of AngloGold traded in New York.

"We think in terms of fundamentals we've demonstrated we've outperformed the ETFs in terms of cash flow from operations," Cutifani said. "In time the market will get it, and we'll get credit for that." - Reuters

Earlier gold report

Conflict gold guidelines "No. 1 priority" for LBMA

MONTREAL (Reuters) - The London Bullion Market Association is working out ways for refiners on its Good Delivery List to avoid falling foul of new regulations against conflict gold as a "number one priority," LBMA chairman David Gornall told Reuters on Sunday.

Due diligence requirements for gold sourced from the war-torn Democratic Republic of Congo are currently under consideration by both the United States and the Organization for Economic Cooperation and Development.

A proposal being considered under the Dodd-Frank financial oversight law would require companies to disclose whether they use "conflict minerals," like gold, from the DRC.

The LBMA, whose Good Delivery List of refiners is the gold industry's chief source of high-quality bullion, says the proposal could be disruptive to the refining industry if it is not swiftly addressed.

Speaking on the sidelines of the LBMA's annual conference here, Gornall said: "We will issue guidance on conflict gold due diligence so that it is practical for the refiners and credible for the outside world."

"The aim would be that the LBMA's guidance will become the OECD's guidance. We are after all the ultimate authority on physical gold, and therefore there can't be anybody better placed to do it than us," he added.

The association hopes to deliver guidance to members by the end of this year or early 2012, he said.

The World Gold Council, the largest industry group representing global gold miners, said in June that it had proposed standards allowing miners to certify their gold production as conflict-free.

But refiners have additional problems in proving the provenance of scrap gold they receive, 1,645 tons of which was returned to the market last year.

"If you've got primary mined gold, it is pretty straightforward where it's come from and you can prove it," said Gornall. "It's the scrap that is" the problem.

"We are going to have to get to the stage where... we take everything that is in existence at the moment from a good delivery refiner to be considered as conflict free," he said. "We have to draw a line and grandfather everything prior to that."

As to whether this prove acceptable to U.S. regulators, he added: "That remains to be seen."

Conflict minerals are a hot topic in the United States. Signatories to the Electronic Industry Citizenship Coalition (EICC), including Apple and Microsoft , have agreed to curb the use of uncertified minerals from the DRC.

The EICC is pushing gold refiners to agree to spot checks on their activities, Gornall said. "We are trying to do something on a broader basis, that doesn't involve individual audits through every one of the good delivery refiners," he said.

"If we can get to a (regulation) that covers not just the conflict gold area but every part of due diligence, we will have done ourselves and the market a great service."

The LBMA's conference has been extended into Tuesday afternoon to include a special session on gold market regulation, said Gornall, who took over as the association's chairman in June.

Regulatory issues are set to become a key concern in years to come as broader financial market regulation spreads, one LBMA delegate said on the sidelines of the event.

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