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Can AngloGold's Cost Discipline Help It Maintain Edge Over Peers?

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Key Takeaways

  • AU's Q1 group total cash costs rose 4% y/y to $1,223/oz, reflecting inflation and higher royalty expenses.
  • Managed operations saw a 2% drop in cash costs per ounce, aided by Sukari and steady output at Siguiri.
  • AU projects 2025 AISC of $1,580-$1,705/oz, up 2% at mid-point, while pushing efficiency through FAP program.

AngloGold Ashanti plc (AU - Free Report) continues to navigate industry-wide inflationary pressures and manages to deliver resilient cost performance, backed by its Full Asset Potential (FAP) program and increased cost vigilance at the site level.

AU reported a 4% year-over-year increase in group total cash costs to $1,223 per ounce in the first quarter of 2025. But digging deeper, the increase reflected a 5% rise in inflation across its operating jurisdictions and a 5% uptick in royalty costs linked to the higher gold prices. Overall, the company saw a 7% increase in market-driven costs. 

Managed operations saw a 2% year-over-year decline in total cash costs per ounce despite increases in royalties. This was driven by the inclusion of Sukari following the Centamin acquisition in November 2024 and steady performance at Siguiri. These gains were partially offset by operational challenges and a temporary plant stoppage at Iduapriem. 

Non-managed joint ventures experienced cost pressures, with total cash costs soaring 59% year over year to $1,325 per ounce. This was due to lower gold production, higher royalties and increased open pit volume-related operating costs at Kibali. 

All-in sustaining costs per ounce (AISC) for the group inched up 1% year over year to $1,640 per ounce in the quarter. At managed operations, AISC per ounce dipped 2% reflecting the positive impact of Sukari’s inclusion, while AISC at non-managed joint ventures increased 37% due to weaker operational performance at Kibali.

For 2025, AngloGold projects group total cash costs at $1,125-$1,225 per ounce, and AISC between $1,580 and $1,705 per ounce. Both ranges indicate a 2% increase at the midpoint from the year-ago reported levels. 

The company remains focused on improving its position on the cost curve, leveraging the FAP program to enhance operational efficiency and productivity offsetting inflationary impacts.

Its cost management appears effective, with only a 1% rise in average real cash costs over the timeframe between first-quarter 2021 and first-quarter 2025. Its peer group, which includes major gold miners like Barrick Mining Corporation (B - Free Report) and Newmont Corporation (NEM - Free Report) , has seen a more than 20% spike in average real cash costs.

Newmont’s gold costs applicable to sales rose 16% year over year to $1,227 per ounce in the first quarter. AISC was $1,651 per ounce, reflecting a roughly 15% year-over-year increase. The rise was attributed to a decline in production due to non-core asset divestments as Newmont shifts its focus to Tier 1 assets. 

Barrick Mining saw a 22% sequential increase in AISC to $1,775 per ounce in the first quarter due to operational challenges, higher total cash costs per ounce and an uptick in mine site sustaining capital expenditure. Lower production due to the suspension of operations at Barrick’s Loulo-Gounkoto mine also contributed to the rise.

AU’s Price Performance, Valuations & Estimates

AngloGold Ashanti’s stock has skyrocketed 104% year to date, outperforming the Zacks Mining – Gold industry’s 53% growth. During this time, the Basic Materials sector has risen 13.7%  and the S&P 500 has rallied 5.9%.

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AU is currently trading at a forward 12-month earnings multiple of 9.51X, at a discount to the industry average of 12.62X. The stock has a Value Score of B.

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The Zacks Consensus Estimate for AngloGold Ashanti’s 2025 sales is $8.85 billion, indicating 52.8% year-over-year growth. The consensus mark for the year’s earnings is $4.99 per share, indicating year-over-year growth of 125.8%. 

The Zacks Consensus Estimate for 2026 sales implies 2.3% year-over-year growth. The same for earnings indicates a decline of 1.3%.

EPS estimates for 2025 and 2026 have been trending north over the past 60 days, as seen in the chart below.

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AU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.


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