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

Core Insights - AngloGold Ashanti plc (AU) is effectively managing inflationary pressures in the industry while maintaining resilient cost performance through its Full Asset Potential (FAP) program and increased cost vigilance at the site level [1] Cost Performance - Group total cash costs increased by 4% year-over-year to $1,223 per ounce in Q1 2025, driven by a 5% rise in inflation and a 5% increase in royalty costs due to higher gold prices, resulting in a 7% overall increase in market-driven costs [2][11] - Managed operations experienced a 2% year-over-year decline in total cash costs per ounce, aided by the inclusion of Sukari and steady performance at Siguiri, although operational challenges and a temporary plant stoppage at Iduapriem partially offset these gains [3] - Non-managed joint ventures faced significant cost pressures, with total cash costs soaring 59% year-over-year to $1,325 per ounce, attributed to lower gold production, higher royalties, and increased operating costs at Kibali [4] All-in Sustaining Costs (AISC) - AISC for the group rose 1% year-over-year to $1,640 per ounce, while managed operations saw a 2% decrease in AISC per ounce due to Sukari's inclusion; in contrast, AISC at non-managed joint ventures increased by 37% due to weaker performance at Kibali [5] Future Projections - For 2025, AngloGold projects group total cash costs to be between $1,125 and $1,225 per ounce, and AISC to range from $1,580 to $1,705 per ounce, indicating a 2% increase at the midpoint compared to the previous year [6][11] - The company aims to improve its cost position by leveraging the FAP program to enhance operational efficiency and productivity, mitigating inflationary impacts [6] Market Performance - AngloGold Ashanti's stock has surged 104% year-to-date, outperforming the Zacks Mining – Gold industry, which grew by 53% during the same period [10] - The company is currently trading at a forward 12-month earnings multiple of 9.51X, which is below the industry average of 12.62X, and holds a Value Score of B [12] Sales and Earnings Estimates - The Zacks Consensus Estimate for AngloGold Ashanti's 2025 sales is projected at $8.85 billion, reflecting a 52.8% year-over-year growth, with earnings estimated at $4.99 per share, indicating a 125.8% increase year-over-year [13] - For 2026, sales are expected to grow by 2.3% year-over-year, while earnings are projected to decline by 1.3% [13]