Our opinion on the current state of ANGGOLD(ANG)

AngloGold Ashanti (ANG) is an international gold producer, once with significant operations in South Africa, including the now-sold Mponeng mine. The company still maintains assets across several countries including the DRC, Tanzania, Ghana, Mali, and the US. It encountered substantial issues in initiating production at the Obuasi mine and faced disputes with the Tanzanian government regarding royalties. Despite divesting from its South African assets, AngloGold has retained its listing on the Johannesburg Stock Exchange (JSE).

On 14th July 2021, AngloGold announced its acquisition of Corvus Gold for R5.4 billion in cash, aiming to extend its exploration efforts in Nevada, USA. The gold market has seen fluctuating prices: peaking over $2000 in August 2020, then dropping below $1700 by March 2021, and since then oscillating sideways and upwards—especially amid heightened tensions from the Ukraine crisis—with current prices around $1900.

For the quarter ending on 30th September 2023, AngloGold Ashanti reported a 3% increase in gold production compared to the previous quarter, from 652,000 ounces to 673,000 ounces. This rise was attributed mainly to processing higher ore tonnes, although it was partially offset by lower recovered grades. The company operates what it describes as a relatively marginal, short-life gold mine with an 11-year lifespan, contending with rising operational costs, diminishing ore grades, and the volatility of gold prices.

In the subsequent update for the quarter ending 31st March 2024, gold production was up by 2%. Notable improvements were recorded at various sites, including Cuiabá (AGA Mineração) with a 55% increase and Serra Grande with a 40% increase, both benefiting from performance enhancement initiatives. Other increases were seen at Kibali (+19%) and Geita (+16%).

The company's stock remains highly volatile, presenting a risky option for private investors, yet it could potentially capitalize on rising gold prices driven by ongoing global tensions, including those in Ukraine and the Middle East. AngloGold Ashanti is also transitioning its primary listing to the US, which may potentially improve its market rating. Technically, the stock has shown an upward trend since March 2024, indicating the possible onset of a new bullish phase.