AngloGold Ashanti reports record profits and strong share price growth

AngloGold Ashanti’s share price continued a 12-month rally on Friday, gaining a strong 6.39% after it reported a 151% increase in second-quarter profit on record gold prices and higher production.

The share price rise to R877.96 added to a more than 74% rally in the price over 12 months. A second quarter dividend of 80 US cents per share was declared, substantially up from 22 cents at the same time last year. The group has since 2021 returned about $1.2bn to shareholders, and the total dividend for the second quarter amounted to $406 million.

The gold miner’s headline earnings increased to $639m in the three months to June 30, from $255m in the same period a year before.

"This is another strong result that demonstrates our focus on cost control and the positive momentum we're building across the business. We're reaping the benefit of consistent production and cash flow growth, supported by disciplined capital allocation," said CEO Alberto Calderon.

Gold production increased by 21% to 804 000 ounces, with growth driven by strong output at Obuasi mine in Ghana, Geita Gold Mine in Tanzania, and Egypt’s Sukari Gold Mine, in which the group had acquired a 50% stake in 2024.

All-in-sustaining costs (AISC) remained flat in real terms for managed operations. Free cash flow increased 149% to $535m. Net debt fell a massive 92% to $92m.

The group directors said the performance was due to the higher average gold price received per ounce, continued cost discipline, and the increase in gold production.

The average gold price received increased to $3 287/oz in the second quarter, from $2 330/oz in the same quarter in 2024. On Friday evening, the spot gold price was trading at $3348.75, up 2.18% on the day.

The disposal of the Archean-Birimian Contact (ABC) and Doropo projects in Côte d'Ivoire was completed in May, and the proposed sale of Serra Grande mine in Brazil was announced in June.

The consolidation of the Beatty District in Nevada was continuing, including the proposed acquisition of Augusta Gold, which will strengthen its position in "the most significant emerging gold district in the US" and enhance an ability to develop the region under a unified regional plan.

The interim dividend of 80 US cents included the minimum quarterly dividend of 12.5 US cents, with the balance reflecting a decision to pay half of free cash flow generated for the six months through to June 30.

“While our dividend policy commits to this 'true up' payment to 50% of free cash flow annually at year-end, the company's board used its discretion to make the payment at the half-year, given the strength of cash flows and its confidence in the outlook,” said Calderon.

The group ended the quarter with liquidity of $3.4bn, including $2bn in cash and cash equivalents.

Headline earnings rose to $639m, or $1.25 per share, compared to $255m, or $0.60 per share, in the second quarter of 2024 — an increase of 151% and 108% year-on-year, respectively.

The production improvements were led by Geita, which continued to deliver strong operating results, and Obuasi, where the ramp-up of underhand drift-and-fill mining progressed on schedule, supporting the 21% year-on-year increase in grade.

Siguiri, Cerro Vanguardia, and Cuiabá also posted modest gains. These were partly offset by declines at Iduapriem, Serra Grande, and Tropicana, while Sunrise Dam held steady.

Total cash costs for the group increased 8% year-on-year to $1 226/oz from $1 137/oz. For managed operations, cash costs rose 6% year-on-year to $1 241/oz, while AISC rose 4% to $1 694/oz.

These increases were driven mainly by a 28% increase in capital expenditure, inflationary cost pressures of about 5%, and a $60/oz average increase in the overall royalty charge linked to the higher gold price. These factors were partly offset by higher gold sales volumes.

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