AngloGold Ashanti plc (AU) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary presents a mixed picture. The company's focus on organic growth and resource conversion is positive, but the lack of specific guidance on payouts and unclear responses on certain issues like the Geita model conversion and Arthur project timelines introduce uncertainty. The dividend policy and capital allocation plans are stable but not overly aggressive. Without a market cap, it's challenging to predict the exact stock movement, but overall, the sentiment leans towards neutral due to balanced positives and negatives.
Key Financial Performance
Free Cash Flow $2.9 billion, up 204% year-on-year. This increase underscores improved quality of earnings, stronger operating leverage, and cost discipline.
Adjusted EBITDA $6.3 billion, up 129% year-on-year. Reflects operational execution and higher gold prices.
Headline Earnings $2.6 billion, up 186% year-on-year. Driven by increased production and higher gold prices.
Net Cash Position $879 million, a turnaround from $567 million net debt at the end of 2024. Achieved despite record dividend payments.
Gold Production 3.1 million ounces, up 16% year-on-year. Managed operations contributed 2.8 million ounces, driven by Sukari and Obuasi.
Cash Costs for Managed Operations $1,252 per ounce, up 5% year-on-year. Increase due to higher royalties and inflation.
All-in Sustaining Costs (AISC) $1,751 per ounce, up 5% year-on-year. Reflects planned reinvestment in sustaining capital.
Dividend Payments $1.8 billion total for 2025, including $875 million in Q4. Reflects strong cash flow and confidence in future performance.
Mineral Reserves Added 10 million ounces, more than 3x depletion. Includes 4.9 million ounces from Arthur Gold project.
Obuasi Gold Production 266,000 ounces, up 20% year-on-year. Supported by investments in ventilation, material handling, and equipment availability.
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Operating Highlights
Arthur Gold Project: Transitioned from discovery to a major high-return project with a first-time mineral reserve of 4.9 million ounces. Expected production of 4.5 million ounces over 9 years with cash costs of $780/ounce and all-in sustaining costs of $950/ounce. Initial project capital estimated at $3.6 billion.
Sukari Operations: Achieved record production and cash flow. Integration is complete, and opportunities for value increase have been identified, including expanding underground operations and improving efficiencies.
Obuasi Mine: Produced 266,000 ounces in 2025, up 20% year-on-year. Investments in ventilation and equipment have improved performance. Production is expected to grow to over 300,000 ounces in 2026.
Nevada Expansion: Arthur Gold Project in Nevada is a significant greenfield discovery with potential for further resource expansion. The project is expected to anchor the portfolio into the 2050s.
Safety Performance: Achieved the lowest total recordable injury frequency rate of 0.97 injuries per million hours worked, outperforming industry averages.
Cost Management: Cash costs for managed operations were up only 5% year-on-year, remaining below inflation and royalties since 2021.
Cash Flow and Earnings: Generated record free cash flow of $2.9 billion in 2025, up 204% year-on-year. Adjusted EBITDA grew 129%, and headline earnings increased 186%.
Portfolio Optimization: Completed the sale of Serra Grande to focus on core business. Tier 1 assets now account for over 70% of production and 80% of reserves.
Dividend Policy: Implemented a new dividend policy with quarterly payouts and annual true-up payments, resulting in a total payout of $2 billion in 2025.
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Risk or Challenges
Lower production from Iduapriem and Sunrise Dam: The company experienced lower production from these two sites, which could impact overall output and financial performance.
Cost pressures from inflation and royalties: Cash costs for managed operations increased by 5%, driven by inflation and higher royalties, which are market-driven factors outside the company's control.
Higher material movement costs in 2026: The company anticipates higher costs due to increased material movement across both underground and open-pit operations.
Sustaining capital expenditure: The company is guiding sustaining capital expenditure of $1 billion to $1.14 billion, which could strain cash flow if not managed effectively.
Non-sustaining capital expenditure: Guidance for non-sustaining capital expenditure is $785 million to $835 million, focused on projects like Nevada and tailings storage facilities, which could pose financial risks if returns are delayed or lower than expected.
Inflationary pressures and foreign exchange movements: Expected to contribute to higher costs in 2026, impacting profitability.
Operational risks at Obuasi: While Obuasi has shown improvement, sustaining these gains and achieving forecasted production increases could be challenging.
Regulatory and social stability: The company emphasizes the importance of social and regulatory stability, which, if disrupted, could impact operations and community relations.
Exploration and reserve replacement: While the company is investing in exploration, failure to replace reserves could impact long-term production and financial stability.
High initial project capital for Nevada: The Nevada project requires an estimated $3.6 billion in initial capital, posing a significant financial commitment with potential risks if the project underperforms.
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Guidance & Outlook
2026 Gold Production: Guidance for group gold production is between 2.8 million ounces to 3.17 million ounces.
2026 Total Cash Costs: Estimated to be between $1,335 an ounce to $1,455 an ounce, reflecting expected inflation, royalties, and foreign currency exchange movements.
2026 Sustaining Capital: Guided at $1 billion to $1.14 billion, focused on maintaining operational reliability and advancing productivity initiatives.
2026 Non-Sustaining Capital: Guided at $785 million to $835 million, with key investments in Nevada, Sukari waste stripping, and tailings storage facilities at Obuasi and Siguiri.
2027 Production and Costs: Production is expected to increase with flat unit costs in real terms, supported by cost leadership and productivity programs.
Nevada Project: Initial probable mineral reserve of 4.9 million ounces with potential for significant expansion. Production expected to average 0.5 million ounces annually over a 9-year life, with cash costs of $780 an ounce and all-in sustaining costs of $950 an ounce.
Obuasi Mine: Production forecast to grow to over 300,000 ounces in 2026, supported by technical advancements and increased lateral development.
Sukari Mine: Plans to expand underground mining from 1.2 million tonnes to 2.3 million tonnes, with additional exploration budget for 2026.
Exploration and Reserve Growth: Increased budget for brownfield exploration in 2026, targeting reserve additions and resource confidence upgrades.
Organic Growth Projects: Plans to add 10%-15% to current production profile over the next 3 years through low-risk, high-return projects at existing mines.
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Shareholder Return Plan
Dividend Declaration: In Q4 2025, AngloGold Ashanti declared $875 million to shareholders as a dividend, which is the highest ever for the company. This brings the total dividend payout for 2025 to almost $2 billion.
Dividend Policy: The company is one year into its new dividend policy, which includes quarterly payouts of $0.125 per share (approximately $63 million) and an annual true-up payment to bring the total payout to 50% of free cash flow. An additional payment of $350 million was made in Q2 2025.
Dividend Sustainability: The company emphasized its confidence in the outlook for its operations and cash flow generation, which supports its ability to sustain high dividend payouts.
Share Repurchase: No specific share repurchase program was mentioned in the transcript.
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Key Q&A
Q:What is the company's stance on the payout ratio given the current gold prices?
A:The payout ratio is being approached one step at a time. The company has committed to taking action if gold prices remain high, but they are not providing specific guidance on future payouts at this stage. The 300 additional million was aimed at achieving net zero by the end of 2025, and the company will consider various options for capital allocation.
Q:Can you provide more details on the organic growth options mentioned on Slide 28?
A:The company is planning a 10% to 15% growth over the 3 million ounces base, equating to 300,000 to 450,000 ounces by the third year. The growth will come from assets like Obuasi, Sukari, Geita, Siguiri, and Cuiaba. Specific details will be provided later in the year, likely in August. For example, Sukari is increasing underground movements from 1.2 million to 2.3 million higher-grade ore, which will add about 100,000 ounces.
Q:How is the company approaching reserve conversion and exploration spending?
A:The company plans to add between 1 million and 1.4 million ounces in 2026. They aim to balance resource and reserve levels, focusing on maintaining a 12 million tons per year production rate for the Arthur project. Exploration continues to yield more resources, and the focus is on advancing the project as quickly as possible.
Q:What is the capital allocation for North Bullfrog and the Ghanaian royalty outlook for 2027?
A:For 2027, North Bullfrog's capital allocation is $320 million, and Arthur Gold's is $90 million. The company has not incorporated any changes in the Ghanaian royalty outlook, as discussions with the government are ongoing.
Q:What is the company's stance on M&A and the disposition of CVSA?
A:The company is currently focused on organic growth opportunities and is not actively pursuing M&A. The sale process for CVSA was halted due to changes in gold and silver prices, and the company is now content with retaining the asset, which has extended its mine life into the 2030s.
Q:What is the company's approach to dividends and buybacks?
A:The company reassesses its approach to dividends and buybacks regularly. Currently, they are focused on a generous dividend policy and have not prioritized buybacks. Decisions on cash allocation will be explained quarterly.
Q:What are the permitting and development timelines for the Arthur project?
A:The company aims to start the federal permitting process in Q1 2027 and complete the feasibility study by Q4 2027. They plan to begin production at the start of the next decade, leveraging the FAST Track 41 process for permitting.
Q:What is the dividend policy and capital guidance for 2026 and 2027?
A:The dividend policy includes a base of $0.125 and a top-up of up to 50% of cash flow, typically paid at the end of the year. For capital guidance, 2027 includes $320 million for North Bullfrog and $90 million for Arthur Gold, along with investments in tailings facilities and open-pit waste stripping at Sukari. In 2026, Nevada's capital spend is lower, with continued investments in tailings and relocation to unlock reserve growth.
Q:What are the next steps for the Arthur project, including feasibility study and resource drilling?
A:The feasibility study for the Arthur project will start in Q2 2026 and is expected to be finalized by Q4 2027. The federal permitting process will begin in Q1 2027. Resource drilling will focus on converting as much as possible, with a goal of potentially reaching 20 million ounces.
Q:What is the company's approach to investing in juniors and M&A?
A:The company takes a multipronged approach to growth, including organic opportunities, greenfield exploration, and strategic stakes in junior projects like Thesis Gold. They continue to assess inorganic opportunities but prioritize maintaining an optimal portfolio.
Q:What was the reason for the negative geological model conversion at Geita?
A:The specific reason for the negative geological model conversion at Geita was not provided during the call. The company noted a net improvement of 1.3 million ounces and will follow up with more details.
Q:How is the company addressing water concerns for the Arthur project in Nevada?
A:The company has reformulated the project to significantly reduce water usage and is engaging in constructive discussions with NGOs. They have developed sophisticated hydrogeological models and are confident in their ability to manage water-related risks.
Q:Review of Unclear Management Responses
A:Management avoided providing specific guidance on future payout ratios, stating that they would take it one step at a time and not anticipate spot prices. They also did not commit to specific timelines for the Arthur project's permitting and development, citing factors beyond their control. Additionally, the reason for the negative geological model conversion at Geita was not clarified, and the company deferred providing details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Geita
Iduapriem Sunrise
Nevada reserve
Siguiri
Silicon
Sukari inclusion
Tier
USD share
cash end
cash generation
confidence outlook
core
cost base
discovery
drift fill
end liquidity
excellence
exploration
factor control
feature
flow increase
gold price
leach
life
mineral reserve
number
operation
opportunity
oxide
partner
payout
price cash
processing
record cash
reserve ounce
return
royalty
sale
sheet cash
study
tonne
AU Transcript
AngloGold Ashanti plc (AU) Q4 2025 Earnings Call Transcript
Unknown2-20
The earnings call summary presents a mixed picture. The company's focus on organic growth and resource conversion is positive, but the lack of specific guidance on payouts and unclear responses on certain issues like the Geita model conversion and Arthur project timelines introduce uncertainty. The dividend policy and capital allocation plans are stable but not overly aggressive. Without a market cap, it's challenging to predict the exact stock movement, but overall, the sentiment leans towards neutral due to balanced positives and negatives.
AngloGold Ashanti plc (AU) Q2 2024 Earnings Call Transcript
Positive8-6
The earnings call reflects strong financial performance, with significant revenue and EBITDA growth, alongside a positive free cash flow turnaround. Despite some operational and supply chain challenges, management's optimistic outlook and proactive strategies to manage costs amid inflation are reassuring. The interim dividend and strong liquidity further support a positive sentiment. However, lack of specific revenue guidance could temper enthusiasm slightly. Overall, the market is likely to react positively, anticipating continued growth driven by new product launches and improved market conditions.
AngloGold Ashanti plc (AU) Q4 2023 Earnings Call Transcript
Positive2-23
The earnings call indicates a positive outlook with strong financial recovery, increased dividends, and strategic operational improvements. Despite inflation and reserve declines, the company has shown resilience with significant mineral resource discoveries and cost-reduction measures. The Q&A section provided clarity on cost stabilization and future guidance, reinforcing positive sentiment. However, some uncertainty remains regarding specific project details and capital allocation, which tempers the overall rating. Given these factors, the stock price is likely to react positively in the short term.
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