SELLING ASSETS SHOULD NEVER BE A GOOD THING
Another struggling sector is mining and in particular gold mining. This is illustrated by AngloGold Ashanti’s announcement that it is selling one of its US mines for $820m − and the share price surged on this news. Selling off assets (in this case gold mines) should not be great news, but in this struggling industry it is certainly viewed as such. The deal is clever in that the company gets an uncapped royalty on future underground production as well as reduced debt and capital expenditure costs. But ultimately the reality is that it is selling assets to keep going – that’s never good.