Anglogold Ashanti PLC (AU) (Q2 2026) Earnings Call Highlights: Record Cash Generation and $2 ...

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Revenue: Not explicitly disclosed in the call; however, the average gold price received rose 35% year-on-year. EBITDA: Rose 46% year-on-year to $2 billion. Headline Earnings: Improved 58% year-on-year to $1 billion. Basic Earnings Per Share (EPS): Increased 49% year-on-year to $0.97, up from $0.132 in Q2 2025. Free Cash Flow: Totaled $727 million in Q2, a 36% increase from $535 million in Q2 2025. Net Cash Flow from Operating Activities: Increased 41% year-on-year to $1.4 billion. Total Cash Costs: Increased 21% year-on-year to $1,480 per ounce, compared to $1,226 per ounce in Q2 2025. Managed Operations Total Cash Cost: Increased 20% to $1,486 per ounce. Cash Taxes: More than doubled year-over-year to $542 million; expected to fall to $230 million-$250 million in Q3 and Q4. Net Cash Position: Ended the quarter at $991 million, a $1.3 billion swing from June 2025. Liquidity: Ample at $4.2 billion. Dividends Declared: Totaled $949 million for the half year, with $364 million declared in Q2. Production: First-half production was stable year-on-year at around 1.5 million ounces (excluding Serra Grande sale). Bond Buyback: Retired $666 million of 2028 and 2030 notes in April.

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Release Date: July 31, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Strong financial performance with EBITDA up 46% to $2 billion and headline earnings up 58% to $1 billion. Robust cash generation with operating cash flow up 49% to $1.8 billion, leading to a net cash position of nearly $1 billion. Sector-leading shareholder returns with nearly $1 billion in dividends declared over six months and a $2 billion share buyback program approved. Successful cost management, offsetting external inflationary pressures through operational discipline and the Full Asset Potential program. High-quality Tier 1 assets accounting for over 70% of production with a 71% cash margin, providing strong leverage to higher gold prices. Promising organic growth pipeline with potential to add 10-15% to production in the next three years from existing operations at low capital intensity. Strong balance sheet transformation, reducing net debt to net cash within 12 months and improving strategic flexibility.

Negative Points

Tragic fatality at Obuasi in April led to a two-week suspension, impacting production and highlighting safety risks. Total cash costs increased 21% year-on-year to $1,480 per ounce, driven by inflation, higher royalties, and fuel costs. External macro pressures, including a 45% increase in Brent crude prices and currency appreciation, are creating significant cost headwinds. Cash taxes more than doubled to $542 million in Q2, a seasonal peak that temporarily reduces free cash flow. Production impacted by the Serra Grande sale and the Obuasi suspension, with lower sales volumes reducing free cash flow by $151 million. Operational challenges at Tropicana and Idiapurim due to lower grades and temporary flooding, respectively, are expected to reduce production. Uncertainty regarding the government's directive to refine gold locally in Guinea (Siguiri) could pose operational or financial impacts.

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Q & A Highlights

Q: Can you provide more information on how the company plans to leverage the approved $2 billion share buyback program? Will purchases be opportunistic or more stable?A: Alberto Calderon (CEO): We are still waiting for approval from the South African Reserve Bank. Once that is received, we will execute the program. The plan is to return excess cash to shareholders, and if the gold price stays at current levels, total capital returns could exceed the 50% of free cash flow dividend policy.

Q: Can you provide more details on the organic growth opportunities identified at assets like Sukari, Cuiaba, and Siguiri, and what the capital requirements might be?A: Alberto Calderon (CEO): We will provide a detailed update in Q3. The projects are low-capEx and high-return. For example, Cuiaba could add around 75,000 ounces in three years, primarily through mining optimization. Siguiri and Sukari involve additional mining equipment and exploration. The current sustaining and growth capital expenditure already includes funding to lay the groundwork for these projects, and we expect to add between 300,000 and 450,000 ounces from a 2025 baseline of about 3 million ounces.

Q: Is it correct that in periods where you pay 50% of free cash flow as dividends, you are still willing to go above that for share repurchases, making total capital returns higher than 50%?A: Alberto Calderon (CEO): That is absolutely correct. If the gold price stays where it is today, that will be the case.

Q: Regarding the growth coming into the portfolio, are you happy with your sustaining and non-sustaining capital intensity at these levels, and will it deliver on that growth?A: Alberto Calderon (CEO): We expect capital intensity to remain stable for some years at around $480 per ounce. We have a significant growth pipeline within our own organic assets, and while we need to invest in it, we do not expect the sustaining capital numbers to increase beyond current levels.

Q: Can you elaborate on the issues at Obuasi, including equipment breakdowns and operational delays? Do these issues risk the ramp-up?A: Alberto Calderon (CEO): The main issue was the tragic fatality in April, which led to a two-week suspension. We also had a catastrophic failure in the ore pass system, which we are operating without currently. We are building a new ore pass expected to be ready by Q4. Despite these challenges, we expect an annualized production rate of 300,000 ounces in the second half, setting the groundwork to deliver on the 2027 target of around 325,000-350,000 ounces.

Q: The realized gold price seems to be quite a bit lower than market averages. Is this just timing, or are there discounts from selling gold to Ghana and Tanzanian authorities?A: Gillian Doran (CFO): It is exactly timing. There was significant volatility in the gold price in Q2, including the largest drop since 2013. The realized price was $90 per ounce lower than the spot price for the quarter due to the timing of sales. We have very small amounts of concentrated sales in Brazil (36,000 ounces), but otherwise, nothing impacts our ability to achieve market prices.

Q: There was an announcement that the government of Guinea will force the flow of gold through their refinery. Has this impacted Siguiri, and is there any impact going forward?A: Alberto Calderon (CEO): We are in conversation with the government. This is something we have seen elsewhere, and we work with governments like in Ghana. We believe we will find a way to deal with it within business as usual. The Minister of Mines is knowledgeable about the industry, and we expect to continue constructive conversations.

Q: Cash costs rose significantly quarter over quarter. Can you provide color on what caused that and if it's sticky?A: Alberto Calderon (CEO): The significant hit this quarter was the increase in royalties. If you look at our "flex costs" (including royalties, fuel price, etc.), we were flat for the quarter. The government increased the royalty by 5%, but reduced the COVID levy by a net of about 2.6%, which you see in taxes below the line. The bulk of the cost increase for the quarter was the royalty impact.

Q: How do you think about the Tier 2 portfolio? Would you theoretically trade at a higher valuation without it, and what makes these assets important to keep?A: Alberto Calderon (CEO): At current gold prices, it's impossible to get the right value for these assets. For example, we tried to sell CASA, but the cash flows for this year are about 60% of what we would receive by selling it. CASA has increased its life from three to five years, and silver is now a byproduct, generating amazing free cash flow. We are happy with our nine operating assets and have no rush to dispose of Tier 2 assets in the current environment.

Q: Where do you see the most compelling near-term growth optionality in the portfolio, and how do you assess risk-adjusted returns?A: Alberto Calderon (CEO): The near-term optionality is in the five core growth assets: Obuasi, Geita, Sukari, Siguiri, and Cuiaba. We have a centralized team focused on understanding bottlenecks and what's needed for growth. We use different discount rates for risk-adjusted returns, but these projects are so profitable that they are way above any hurdle we have for investment, even with the risk component.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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