ZACKSยท2025-08-20 15:21Core Viewpoint - AngloGold Ashanti and Kinross Gold are two leading gold producers with diversified mining operations across various continents, both positioned to benefit from the ongoing rise in gold prices [1][27]. Group 1: Gold Market Overview - Gold prices recently fell to $3,320 per ounce due to easing geopolitical concerns and a stronger U.S. dollar, but have increased 26% year-to-date, driven by safe-haven demand and geopolitical risks [2]. - Central bank buying and expanding industrial use in sectors like energy, healthcare, and technology are expected to support gold prices moving forward [2]. Group 2: AngloGold Ashanti Analysis - AngloGold Ashanti, based in South Africa, has operations in multiple countries and recently acquired Centamin, enhancing its asset base with the Sukari mine, which has a production potential of 500,000 ounces annually [4]. - In Q2 2025, AngloGold's gold production rose 21% year-over-year to 804,000 ounces, with a projected production range of 2.9-3.225 million ounces for 2025, indicating a year-over-year growth of 9-21% [5]. - Gold revenues in Q2 increased by 78% to $2.4 billion, although higher operating costs partially offset these gains [6]. - Total cash costs per ounce rose 8% to $1,226, while all-in-sustaining costs increased 7% to $1,666, with earnings per share up 108% to $1.25 [7]. - Free cash flow surged 149% year-over-year to $535 million, with liquidity at $3.4 billion and adjusted net debt reduced by 92% to $92 million [8]. - The company is focused on its Full Asset Potential program and has made strategic acquisitions to enhance its growth [9][10]. Group 3: Kinross Gold Analysis - Kinross Gold, headquartered in Canada, operates in several countries and has a strong production profile with promising exploration and development projects [14]. - In Q2 2025, Kinross's revenues rose 41.7% year-over-year to $1.73 billion, with adjusted earnings per share increasing to 44 cents from 14 cents [17]. - The company produced 512,574 gold equivalent ounces, a 4.3% decrease year-over-year, but higher production from certain mines offset declines from others [16]. - Kinross ended Q2 with solid liquidity of approximately $2.8 billion and free cash flow increased by 87% year-over-year to a record $647 million [18]. - The company has been reducing debt levels, ending Q2 with a total debt to total capital ratio of 0.14 [19]. Group 4: Earnings Estimates and Valuation - The Zacks Consensus Estimate for AngloGold Ashanti's 2025 earnings is $4.96 per share, reflecting a year-over-year growth of 124.43%, but a slight dip is expected in 2026 [20]. - Kinross Gold's earnings estimate for 2025 is $1.38 per share, indicating a year-over-year jump of 103%, with a slight growth expected in 2026 [21]. - In the past six months, AngloGold's stock gained 64.8%, while Kinross's stock increased by 70.5% [23]. - AngloGold is trading at a forward earnings multiple of 11.01X, while Kinross is at 13.40X, both higher than their five-year medians [25]. Group 5: Investment Outlook - Both companies are well-positioned to benefit from rising gold prices, but Kinross Gold has shown stronger year-to-date price performance and has a more compelling project pipeline [27]. - Kinross Gold is rated as a Strong Buy, while AngloGold Ashanti holds a Hold rating, indicating a preference for Kinross as a more attractive investment option [28].