Nov. 10 (Bloomberg) -- AngloGold Ashanti Ltd., Africa's largest gold producer, said it's seeking to refinance a $1 billion convertible bond within the next seven weeks amid a global financial crisis that's frozen credit markets.

``It's our most important issue to resolve in the short term and we'd like to see that resolved by Christmas,'' Chief Executive Officer Mark Cutifani said in an interview in New York. Securing debt ``is a challenge for everybody,'' he said.

AngloGold, based in Johannesburg, will seek bridge financing of about a year to repay the bond, giving the company time to find less-costly longer-term options, he said Nov. 7. The company has ``talked terms'' with a 21-bank syndicate.

Since taking over a year ago, Cutifani has reduced AngloGold's contracts to sell gold at below market prices, pared debt and sold assets. Now, he must raise $1 billion amid the worst financial crisis since the Great Depression.

``If they can refinance, that would be good for them,'' Tom Winmill, president of New York-based Midas Management, said in a telephone interview from New Hampshire. ``The bigger-cap companies seem to be able to access the credit market.''

The convertible bond market has ``effectively closed'' and may remain so about a year, Cutifani said. An interest rate of 5 percentage points above the London interbank offered rate is at the ``top end'' of the loan's probable cost.

`Bridging Financing'

``Bridging finance is going to be expensive, especially in this market, so we prefer to put a short-term solution in place and give ourselves the 12 months to come up with long-term cost- effective financing that works for us,'' Cutifani said.

AngloGold plans to sell ``non-strategic'' assets and prioritize spending on gold projects in countries including Colombia and Australia. The company wants to keep mines that will yield a return on capital of at least 15 percent, more than double the industry's long-term average, he said.

``There are a couple of other assets, quite significant in our portfolio, that we see as non-strategic,'' Cutifani said, without naming them. No assets are ``sacred,'' he said.

AngloGold American depositary receipts, each equivalent to one share, gained 59 cents, or 3.3 percent, to $18.51 as of 4:15 p.m. in New York Stock Exchange trading. The stock has fallen 55 percent this year.

The Tau Lekoa mine in South Africa is for sale and AngloGold is also in talks with Toronto-based Iamgold Corp. about selling its stake in two mines in Mali.

Colombia Discovery

AngloGold has made recent new discoveries in the Democratic Republic of Congo, Australia and Colombia. The company has ``significant indicators'' that its 30-square mile concession south of the Colombian capital of Bogota may contain areas capable of yielding 20 million ounces of gold.

``We are just scratching the surface of the area we have, so we are very excited about Colombia,'' Cutifani said.

Recent unrest in the Congo has prompted AngloGold to pull ``a couple of hundred'' staff out of the country and suspend work on the Mongbwalu concession. Drilling continues at the La Colosa and Tropicana mines in Colombia and Australia, he said.

AngloGold is considering an initial public offering of a new company to fund mine development, he said. In Australia, there's a ``potential niche'' for a company producing 1 million ounces of gold a year to compete with locally traded companies such as Lihir Gold Ltd. and Newcrest Mining Ltd., he said.

``We remain open to those possibilities,'' Cutifani said. ``It may be better to do an independent IPO of that vehicle, retain a good shareholding and look at funding that in a different way.''

Cutifani, an Australian, succeeded Robert Godsell as chief executive of AngloGold in October 2007. Formerly, he was Chief Operating Officer for Cia. Vale do Rio Doce's Inco unit, responsible for the company's global nickel business.

Reducing Hedges

The company's existing operations will benefit from lower operating costs, including falling oil prices and weaker currencies in South Africa, Australia and Brazil. A reduction in hedge contracts will also allow the company to sell gold at a 6 percent discount to the market price, compared with the 18 percent discount in the third quarter, Cutifani said.

``When we come into the first quarter of 2009, we'll see a fairly significant kick in our earnings because of the lower discount to spot,'' he said. ``There's a range of things we've been doing to improve our positioning and we'll see that in quarter one.''

To contact the reporters on this story: Stewart Bailey in New York at sbailey7@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.

Last Updated: November 10, 2008 17:13 EST