$2,200 Gold By 2012

Posted by - Monday, September 19th, 2011

A leading global gold producer has high hopes for the price of gold in the coming year.

Just yesterday, CEO Mark Cutifani with AngloGold Ashanti Ltd – a gold mining company with operations in 11 countries (21 operations total) and listed on five stock exchanges – predicted gold to reach $2,200 per ounce by next year. He also alluded to a strong potential for a dividend boost for the South African miner.

Cutifani believes this will happen on account of what's going on in the U.S and Europe. The debt crises and the poor market reactions leave investors with few options in these tough times. The #1 choice, far and away from other investment options, is still gold.

In the past year alone, gold has appreciated by approximately 40 percent. Spot prices are currently hovering around $1,800 per ounce in trading.

According to Cutifani, AngloGold Ashanti is making cash on everything over $1,000 per ounce. He's pretty happy with the position their in, as gold is set to keep rising upwards. Overall the company has fared pretty well for itself since it formed back in 2004. And the recent economic turmoil could be a bit of good news for dividend holders...

This week, he and other mining executives will meet and discuss the price of gold as well as the possibility for higher dividend payouts. They'll be doing so at the annual Denver Gold Forum meeting in Colorado Springs, Colorado – one of the largest gold mining companies/gold investor meetings in the world.

It's a big week for gold investors to get a good feel for where gold is headed after this year, as this particular meeting will take place around the same time as the gold bullion meeting in Montreal, Canada (meetings began here yesterday).

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 (ABX.TO), 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.


*Indented exerpts from REUTERS


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