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Gold bars are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich March 3, 2014.

MICHAEL DALDER/REUTERS

AngloGold Ashanti Ltd. is considering selling its prized American gold mine in order to raise much-needed cash, according to people familiar with the matter.

The decision to shop its Cripple Creek & Victor mine comes five months after the South African miner abruptly killed plans to hive off its international operations and sell $2-billion (U.S.) in shares.

At the time, AngloGold's chief executive called the company's $3-billion debt unsustainably high and said "asset sales are on the cards."

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The company has started sending out confidential agreements to prospective buyers, one of the sources said.

An AngloGold spokesman said "we don't comment at all on market speculation."

Unlike other gold mines that were for sale last year, the Cripple Creek mine in Colorado has rich reserves and relatively low costs, which will likely generate interest from Canadian gold miners. The industry has been under pressure to get rid of expensive mines and slash costs to weather weak gold prices.

Although bullion is up 5 per cent to $1,260 an ounce this year, the precious metal is still down a third from its peak in 2011.

Analysts said Iamgold Corp. and Kinross Gold Corp. both have cash to make an acquisition and would strengthen their respective portfolios.

Iamgold, which has at times produced bullion at a loss when gold was below $1,200, has been scouring the world looking for another gold asset that will reduce its overall production costs. The company already jointly owns a mine with AngloGold in Mali and operates mines in Canada, West Africa and South America.

Kinross is under pressure to find a new source of gold because its best mines are in Russia and a potential expansion at its Tasiast mine in Mauritania would be uneconomical amid the gold slump. The company's exposure to Russia has depressed the miner's stock as shareholders fear the Russian government could clamp down on foreign investment in the country in retaliation for Western sanctions.

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"The market is skeptical of Tasiast, so the concept of buying something in a good jurisdiction with a long reserve life and focusing on that … makes sense," said Chris Mancini, an analyst with the Gabelli Gold Fund.

AngloGold is one of the world's largest gold producers. The bulk of its operations are in Africa. The company has also been trying to unload its mineral properties in Colombia.

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