AngloGold Ashanti's Q3 2025: Contradictions in CapEx Strategy, Dividend Payouts, and Cash Lockups

Guidance:

• Expect to be within full-year guidance range; estimate royalties impact of ~ $40/oz.
• Expect a strong Q4 with Obuasi ramping and Tier‑1 assets >70% of production.
• FY capital spend to remain within guidance; Q4 fleet orders will increase spend but manageable.
• Geita: additional $50M (plus $15M/yr) to target ~60% reserve growth (target ~4–5Moz by 2028); mill expansion ~$100M could lift production ~20% to ~600koz.
• Northrop (Nevada): prefeasibility study through year-end; results expected in February.
• Dividend policy: quarterly payouts plus an annual true‑up to 50% of free cash flow; Q3 declared $460m.

Business Commentary:

* Strong Financial Performance: - AngloGold Ashanti reported free cash flow of almost $1 billion for Q3, nearly matching the full-year 2024 cash flow, with an adjusted net cash position of €450 million. - The strong financial performance was driven by improved portfolio resilience, steady operational execution, and cost control, allowing the company to maintain a stable cash cost and fully sustaining cost.

• Production Growth and Resilience:
• Total cash cost for managed operations year-to-date was only up 3%, in contrast to macro factors indicating a 9% increase due to inflation and increased royalties.

• Growth was supported by higher contributions from Obuasi, Kibali, Geita, and Cuyaba, while lower production from Eagle Pume and temporary plant stoppages at Siguiri were offset.

• Investment in Growth Opportunities:
• The company is investing $50 million in Geita to increase reserves by 60%, extending its life to 10 or more years, and achieving an exceptional capital intensity of $1,000 per ounce of incremental annual production.

• This investment is aimed at leveraging the existing geological quality and longevity to sustain Geita's tier one status and unlock significant value.

• Dividend Strategy and Shareholder Returns:

• AngloGold Ashanti declared a dividend of $460 million for Q3, matching the first-half payout of $469 million, providing a generous and high yield for shareholders.

• The dividend strategy reflects the company's confidence in its business outlook and exceptional cash flow generation, with a commitment to distributing 50% of free cash flow to shareholders.

• Exploration and Reserve Building:

• Since 2017, AngloGold Ashanti has added 2 million ounces of reserves, with a cost of only $39 per ounce, reflecting the quality of its geology and exploration team.
• The company aims to extend Geita's reserve life to 4 to 10 years or more by 2028, supported by a rich pipeline of targets and ongoing exploration investments.
  
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: “I’m pleased to report another excellent quarter,” free cash flow for the quarter ~ $1,000,000,000, adjusted net cash position ~$450,000,000, headline earnings and adjusted EBITDA up materially; announced large dividend declarations ($469m H1, $460m Q3) and reiterated confidence in guidance and portfolio momentum.

Q&A:

• Question from Yamin Gossain (Lorien Capital): The current CapEx run rate is around $368,000,000 a quarter, implying $590,000,000 in Q4 to reach the midpoint of guidance. Can we expect to see a big CapEx number in q four, or will some of this be rolled over to ’26?
  Response: CapEx expected to remain within full‑year guidance; Q4 will see some increased fleet orders but overall spend will be managed and remain relatively stable.

• Question from Herbert Carriva (Absa): What is the outstanding dividend payment from CVSA, and is it likely that you received the an amount this quarter?
  Response: CVSA’s 2024 financials are finalized enabling significant dividends to flow to the parent with no material restrictions, while retaining normal working capital locally.

• Question from Larry Clausen (Red Intelligence): Have we paid back any of our bonds over the quarter?
  Response: No — there were no bond repayments during the quarter.

Contradiction Point 1

Capital Expenditure (CapEx) Strategy

It involves changes in capital expenditure strategy, which impacts financial plans and resource allocation, impacting operational efficiency and potential future growth.

Will Q4 CapEx be significant, or will some of it be deferred to 2026? - Yamin Gossain(Lorien Capital)

2025Q3: We anticipate relatively stable capital spend in areas like stripping or development. There will be an increase due to fleet management strategy, but it will be well within our guidance range for the full year. - Jillian(CFO/Financial Executive)

Do you have enough resources to remain competitive on the cost curve? When will the 360 target be achieved at Obuasi? - Adrian Hammond(SPG Securities)

2024Q2: Our overall cost performance remains strong and we are well placed to counter inflationary pressures and remain competitive on the cost curve. Our expectation is that our cash cost per ounce, including by-product credits, will be in the range of 1,120 US$ to 1,220 US$ for the year. - Alberto Calderon(CEO, Executive Director)

Contradiction Point 2

Dividend Payout Strategy

It involves changes in dividend payout strategy, which is critical for shareholder value and investor confidence.

What is the remaining dividend payment from CVSA, and will you receive it this quarter? - Herbert Carriva(Absa)

2025Q3: We have finalized our 2024 financial statements for CVSA, allowing us to pay dividends to the parent company. We've made significant progress in reducing cash lockups in Argentina. - Jillian(CFO/Financial Executive)

What are your plans for cash if prices stay high? Will hedges be reviewed or extended? - Chris Nicholson(RMB Morgan Stanley)

2024Q2: We have a goal of a 20% of earnings dividend payout ratio. That's our commitment as the minimum. - Alberto Calderon(CEO, Executive Director)

Contradiction Point 3

Dividend Payments and Cash Lockups

It involves the expectations and timeline for dividend payments and cash lockups, which directly impact shareholder returns and financial stability.

What is the outstanding dividend payment from CVSA, and did you receive it this quarter? - Herbert Carriva (Absa)

2025Q3: We have finalized our 2024 financial statements for CVSA, allowing us to pay dividends to the parent company. We've made significant progress in reducing cash lockups in Argentina. Cash lockups have been reduced from 176 to 100, with no surprises given the political changes in Argentina. - Jillian (CFO/Financial Executive) and Alberto (Executive, likely CEO)

What item was excluded from guidance, and is it linked to North Bullfrog? - Raj Ray (BMO Capital Markets)

2023Q4: CVSA had a strong operational performance in the quarter and will declare a dividend of $130 million for the quarter, bringing the full-year dividend to $350 million. - Alberto Calderon(CEO)

Contradiction Point 4

CapEx Allocation and Timing

It involves the allocation and timing of capital expenditures, which are critical for company growth and operational efficiency.

Will there be a significant capital expenditure in Q4, or will part of it be deferred to 2026? - Yamin Gossain (Lorien Capital)

2025Q3: We anticipate relatively stable capital spend in areas like stripping or development. There will be an increase due to fleet management strategy, but it will be well within our guidance range for the full year. - Jillian (CFO/Financial Executive)

What will 2025 CapEx be directed toward? - Josh Wilson (RBC)

2023Q4: CapEx guidance for the year is $600 million to $650 million, excluding growth capital. Total CapEx is expected to be in the range of $1.1 billion to $1.3 billion. Studies in Nevada and the usual growth capital for various assets. 2025 CapEx will not be for construction but related to study and infrastructure improvements. - Gillian Doran(CFO)

Contradiction Point 5

Capital Expenditure and Guidance

It involves the company's capital expenditure plans and guidance, which are crucial for understanding the company's financial strategy and investment priorities.

Will Q4 CapEx be significant or will it be delayed to 2026? - Yamin Gossain (Lorien Capital)

2025Q3: We anticipate relatively stable capital spend in areas like stripping or development. There will be an increase due to fleet management strategy, but it will be well within our guidance range for the full year. - Jillian(CFO)

What are the inflationary pressures at Serra Grande and their main driver? Is this trend sustainable into 2022? - Unidentified Analyst (RMB Morgan Stanley)

Earnings Call Transcript: We're looking at 2022 to be a similar level of CapEx to 2021, with spending on M&A on the back end and spending on sustainability up a little bit. - Alberto(CEO)