AU - AngloGold Ashanti Limited
| Previous Close | 20.94 |
| Open | 21.26 |
| Bid | 20.14 x 1200 |
| Ask | 20.15 x 800 |
| Day's Range | 20.03 - 21.25 |
| 52 Week Range | 11.29 - 23.85 |
| Volume | 2,833,655 |
| Avg. Volume | 2,785,900 |
| Market Cap | 8.337B |
| Beta (5Y Monthly) | 0.03 |
| PE Ratio (TTM) | 39.50 |
| EPS (TTM) | 0.51 |
| Earnings Date | N/A |
| Forward Dividend & Yield | 0.07 (0.32%) |
| Ex-Dividend Date | Mar 20, 2019 |
| 1y Target Est | 23.93 |
- InvestorPlace
The Interview That Should Terrify Owners of Freeport-McMoRan Stock
On paper, there's an intriguing bull case for miner Freeport-McMoRan (NYSE:FCX). Freeport-McMoRan stock looks cheap. Copper prices have dipped of late, but have at least one important long-term tailwind. And Freeport has steadily improved its balance sheet in recent years, cutting net debt by over $12 billion between the end of 2015 and the end of 2019.Source: MICHAEL A JACKSON FILMS / Shutterstock.com But the key phrase is "on paper." In practice, there's a huge stumbling block to the bull case for FCX stock. Even if Freeport-McMoRan can drive higher free cash flow, as bulls and the company itself project, there's a long-running concern as to where that cash flow is going to go.The answer, according to a recent interview with Freeport-McMoRan's chief executive officer, is not to shareholders. Given the history not just of Freeport but the entire mining industry, that's a significant problem.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Case for Freeport-McMoRan StockFCX stock already has been a solid investment in the last few years. Shares bottomed in January 2016 below $4, as pressure on the company's since-divested oil and gas assets weighed on the stock. From that bottom, Freeport-McMoRan stock has more than tripled -- and there's a case for more upside ahead. * 20 Stocks to Buy From the Law of Accelerating Returns After all, production should increase nicely in the next two years. After its fourth-quarter report last month, Freeport guided for copper sales to reach 3.5 billion pounds in 2020, up from 3.3 billion in 2019. In 2021, however, the figure should spike to 4.3 billion, as the Grasberg mine in Indonesia, of which FCX owns 49%, returns to normalized output after a shift to underground mining.From there, copper prices need to cooperate, and that's always a risk. Copper prices are notoriously sensitive to the global economy; the commodity has been nicknamed "Dr. Copper" for its ability to provide a leading indicator of macroeconomic strength. A poorly-timed recession -- or even continued softness in key markets in Asia -- could pressure prices and thus Freeport's earnings and cash flow.But there's one potential long-term driver for copper demand: electric vehicles. EVs are "copper hogs," meaning growth from the likes of Tesla (NASDAQ:TSLA) can boost copper prices. and those prices drop almost straight to Freeport's bottom line. It's not as if shares are expensive even in the current moderate-price environment; should copper spike higher from here, Freeport stock likely does the same. Balance Sheet and Cash FlowFinally, Freeport's balance sheet is in much better shape. As noted, debt has come down dramatically in a matter of years. The company has over $5 billion in liquidity, and a higher stock price if it wants to make an acquisition. If Freeport doesn't make a deal, free cash flow should impress -- particularly if copper prices rise.Indeed, with its fourth-quarter presentation, Freeport-McMoRan modeled solid free cash flow in a higher-price environment. At $3 per pound, up from a current ~$2.60, operating cash flow in 2021-2022 would be in the range of $5 billion.Capital expenditures currently estimated at $2.4 billion for 2021 suggest free cash flow around $2.6 billion. Put even a 10x multiple on that figure and FCX gains over 50%; increase the multiple, and the upside could be even higher. Where Does the Cash Go?To be sure, that paper case does require some help from copper prices. Models for 2021-2022 at $2.75 a pound suggest free cash flow under $2 billion. A market capitalization currently near $19 billion thus likely doesn't see that much upside without pricing help. But investors in mining stocks are looking for leveraged returns on gains the underlying commodity -- and on paper FCX stock is set up to provide precisely those returns if copper gains.But that gets to the practical problem, and the interview CEO Richard Adkerson gave to Reuters at the end of last month. Adkerson noted the potential for higher cash flow and a higher stock price which would allow the company to make acquisitions."I'm looking forward to having a new experience in my career toward accessing alternatives and deciding which way we go…We don't have a clear directive now on what that direction could be, but we will be attractively situated and will have an opportunity to add value through investments," he told Reuters.Those investments could include not just acquisitions but the construction of new mines.In other words, the incremental free cash flow Freeport-McMoRan hopes to drive isn't going back to shareholders. It's going back into the business under Adkerson's direction. And that should worry, if not terrify, FCX shareholders. Adkerson's HistoryAdkerson was named CEO on Dec. 10, 2003. Under his watch, Freeport-McMoRan stock has declined by 42%.There isn't an external reason for the pressure. Copper prices, according to data from YCharts, have increased 174% over that span. Meanwhile, diversified miner BHP Group (NYSE:BHP), which has significant copper holdings, has seen its stock more than triple. Including dividends, BHP has posted a total return of more than 450%. For Freeport-McMoRan stock, total returns remain modestly negative.One big reason for the decline was the aforementioned move into oil and gas, spearheaded by Adkerson. Freeport-McMoRan spent $20 billion on two acquisitions in 2012 at the height of the oil boom. The moves were instantly criticized by Wall Street and by investors; Freeport stock dropped 16% in a single day on the announcement. Allegations of self-dealing soon followed.Less than four years later, Freeport managed to get less than $4 billion for its assets at the nadir of the oil bust. Over $16 billion in shareholder value was destroyed.An investor might believe -- or want to believe -- that Adkerson and the Freeport board have learned their lesson from the disastrous acquisitions. There's no evidence they have.The Freeport-McMoRan dividend was slashed in 2014; the board hasn't hiked the payout since despite a paltry 1.6% yield and the expected growth in free cash flow. Adkerson, at least per his interview, is looking to spend more shareholder money after the company spent the last four years recovering from its foray into oil and gas.There are thus two scenarios here. Copper prices fall or stay roughly flat, and Freeport-McMoRan stock likely does the same. Or copper prices rise, giving Adkerson free reign to go and spend billions of dollars more of shareholder funds. Neither sounds particularly attractive. The Mining ProblemTo be somewhat fair, this is not a Freeport-only problem. As I detailed back in 2018, gold miners like Barrick Gold (NYSE:GOLD) have done a disastrous job of fulfilling their mission of providing leverage to the gold price. Barrick, Kinross Gold (NYSE:KGC) and AngloGold Ashanti (NYSE:AU) all saw their shares fall by over 60% even in a rising-price environment.Recent performance for mining stocks has been better, but it's still not as good as it should be in theory. Even the gains in Freeport stock over the last few years are more a case of the stock rallying sharply from 2016 lows than any real improvement on the ground. FCX stock actually is down 20% over the past three years despite basically flat copper prices. The Bottom Line on Freeport-McMoRan StockWhat makes a stock like FCX particularly problematic is that the exchange-traded fund revolution has created far better alternatives. An investor who is bullish on copper can simply buy copper through an ETF. She can lever up that bet through the use of margin or a 2x or 3x ETF. Those trades have risk if copper prices decline of course; so does FCX.But if copper prices rise, that investor doesn't have to let Adkerson determine what to do with her gains. ETFs do have fees, but they're generally minimal; meanwhile, Adkerson's pay packages from 2016 to 2018 alone totaled over $50 million, according to Freeport's most recent proxy statement.If Freeport-McMoRan and Adkerson truly had learned their lesson and were looking to use potentially higher cash flow for increased shareholder returns, that would be one thing. Clearly, they're not. History, and the -42% returns under Adkerson's 16-year tenure, both suggest that it is a real problem for Freeport-McMoRan stock.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 20 Stocks to Buy From the Law of Accelerating Returns * 10 Strong Lottery Ticket Stocks That Could Soar in 2020 * 7 U.S. Stocks to Buy on Coronavirus Weakness The post The Interview That Should Terrify Owners of Freeport-McMoRan Stock appeared first on InvestorPlace.
ReutersEMERGING MARKETS-Surge in coronavirus cases, deaths bog down EM assets
Emerging market stocks and currencies came under pressure on Thursday after a jump in coronavirus cases and deaths reported under a new diagnostic method in China hammered investors' hopes that the outbreak might soon peak. The death toll from the outbreak in China had reached 1,367 as of the end of Wednesday, up 254 from the previous day, the country's National Health Commission said.
- Bloomberg
AngloGold Seals South Africa Exit With $300 Million Asset Sale
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterSouth Africa’s fading gold industry has a new champion as iconic miner AngloGold Ashanti Ltd. sells its last remaining assets to Harmony Gold Mining Co.The $300 million deal marks the exit from South Africa of AngloGold, a company that emerged from a mining empire created by Ernest Oppenheimer a century ago. It also heralds a new era as Harmony, backed by black billionaire Patrice Motsepe’s African Rainbow Minerals Ltd., becomes the nation’s No. 1 gold producer.AngloGold is departing an industry that’s become expensive and dangerous as mines extend miles underground. The sector is less than a fifth of the size it was at its peak and its importance to the economy is rapidly diminishing. That doesn’t deter Harmony, which squeezes profits from a portfolio of mines by cutting costs and extending their lifespan.“We don’t think it’s a bad thing to be the last man standing,” Harmony Chief Executive Officer Peter Steenkamp said Wednesday on a conference call. “We have a different cost structure to Anglo.”Harmony shares climbed as much as 7.9%, before trading 3.9% higher as of 2:51 p.m. in Johannesburg. AngloGold gained 0.7%.The acquisition of AngloGold’s Mponeng mine and surface assets will help Harmony replenish its South African reserves. It will also boost output by about 350,000 ounces a year to more than 1.8 million ounces.Steenkamp expects to replicate the strategy employed when Harmony paid AngloGold $300 million in 2017 for its Moab Khotsong mine. Half of that money has already been paid back, the CEO said.Curbing costs at Mponeng, the world’s deepest mine, will be the key test for Harmony, said Rene Hochreiter, an analyst at Noah Capital Markets Ltd. in Johannesburg.“Harmony has shown what it can do when it comes to cutting costs when it acquired Moab,” Hochreiter said. “If it can do the same this time, there is substantial upside to the profitability of Mponeng and Harmony itself. If it doesn’t manage to do better than AngloGold did, this deal is not a dripping roast.”Harmony will acquire the new assets with $200 million of cash, plus deferred payments related to the performance of the operations. The AngloGold assets had a book value of 9.9 billion rand ($670 million) at the end of 2019, it said.For AngloGold, the sale furthers CEO Kelvin Dushnisky’s strategy of selling smaller operations as the producer focuses on more profitable mines in Ghana, Australia and the Americas.The sale may also pave the way for AngloGold to move its primary listing from Johannesburg. Analysts say that shifting to Toronto or London would narrow the discount that AngloGold shares trade at to larger rivals such as Barrick Gold Corp.“There is a window of opportunity in the current gold price environment to get a sale done and AngloGold is right to take advantage of this,” said James Bell, an analyst at RBC Capital Markets in London. “Closing today’s sale of the group’s South African assets and a potential move of its primary listing to London in time could also materially widen the group’s investor base.”(Updates with analyst comments in eighth paragraph)To contact the reporter on this story: Felix Njini in Johannesburg at fnjini@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Dylan Griffiths, Nicholas LarkinFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Financial Times
AngloGold sells world’s deepest gold mine in South Africa exit
AngloGold Ashanti has sold its last South African mine to rival Harmony Gold, in a move that could pave the way for the company to shift its primary listing from Johannesburg to London. AngloGold said on Wednesday that it had reached a deal to sell Mponeng and its surface assets for $300m, or less than half book value. The company, which can trace it roots back the mining empire created by Ernest Oppenheimer, was formed in 1998 through the consolidation of Anglo American’s gold mines in South Africa, and later merged with Ashanti Goldfields of Ghana.
- Bloomberg
AngloGold Picks Harmony to Buy South African Assets
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterAngloGold Ashanti Ltd. picked Harmony Gold Mining Co. as the buyer for its last remaining South African operations, according to people familiar with the matter.The two companies are finalizing the exact terms of the deal for the Mponeng mine and surface facilities, said the people, who asked not to be identified because the information is private.AngloGold is selling the assets as Chief Executive Officer Kelvin Dushnisky focuses on more profitable mines in Ghana, Australia and the Americas. Harmony -- backed by billionaire Patrice Motsepe’s African Rainbow Minerals Ltd. -- is hunting for deals to replenish declining reserves in South Africa. Harmony paid $300 million for AngloGold’s Moab Khotsong mine in 2017.AngloGold spokesman Chris Nthite declined to comment.Harmony is looking at potential acquisitions in South Africa and has a plan to finance the deals, Chief Executive Officer Peter Steenkamp said on a conference call Tuesday to discuss the company’s half-year results. The company is looking at assets with at least 1 million ounces of reserves and a 10-year life span, he said.AngloGold’s mines could be used as “criteria if we are to evaluate any assets” in South Africa, Steenkamp said.“We understand and we do have the ability and expertise to run underground mines,” he said. “We will not necessarily shy away from underground mines.”AngloGold’s Mponeng mine, the world’s deepest, produced 265,000 ounces of gold in 2018, while output from its surface operations, which extract the precious metal from ore dumps, totaled 171,000 ounces. Those South African assets accounted for about 13% of AngloGold’s production that year.AngloGold said last week it plans to provide an update on the asset sale on Feb. 21. In November, AngloGold narrowed the list of bidders for its South African assets to Harmony and Sibanye Gold Ltd., people familiar with the matter said at the time.The strategic rationale to find a buyer “trumps a straight valuation call” for the operations, said James Bell, an analyst at RBC Capital Markets in London. AngloGold needs to sell the assets before it can move its primary listing from Johannesburg to London, “something that we think could drive a material re-rating in time.”(Updates with Harmony CEO’s comments from fifth paragraph)To contact the reporters on this story: Felix Njini in Johannesburg at fnjini@bloomberg.net;Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Andre Janse van VuurenFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Rebirth of Century-Old Gold Mine Cements Ghana’s African Crown
(Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterThe rebirth of a century-old mine is cementing Ghana’s crown as Africa’s biggest gold producer.On Wednesday, AngloGold Ashanti Ltd. and President Nana Akufo-Addo marked the first gold pour at the Obuasi mine in southern Ghana since operations were idled in 2016. The decision to reopen the mine rings in another two-decade run for an asset with a history dating back to 1897.Obuasi is expected to add as much as 400,000 ounces or more per year to Ghana’s output, almost a 10th of what the West African nation produced in 2018 when it overtook South Africa as the continent’s biggest gold producer.For Ghana, the additional gold will boost foreign earnings at a time when growth in oil production is slowing and create hundreds of jobs in a region where poverty is rife.AngloGold first curtailed output at Obuasi in 2014 as soaring costs made production unprofitable, before losing control over the mine when illegal miners invaded the property in January 2016. Barrick Gold Corp. Chief Executive Office Mark Bristow turned down an opportunity to jointly redevelop the mine during this period, when he was still leading Randgold Resources Ltd., casting a shadow over the future of the operation.It was only in 2018 that AngloGold approved spending as much as $545 million on the redevelopment of the mine into a mechanized, modern operation. The decision expanded the company’s African footprint outside of South Africa, where it’s now selling its last remaining assets.African operations, excluding those in South Africa, contributed 44% to AngloGold’s revenue in 2018. Gold accounted for 40% of Ghana’s exports in the first 10 months of 2019.(Updates with Ghana gold exports in final paragraph. A previous version of the story corrected the final paragraph to show that African operations outside South Africa contributed 44% to AngloGold’s revenue, and not earnings.)To contact the reporter on this story: Andre Janse van Vuuren in Accra at ajansevanvuu@bloomberg.netTo contact the editors responsible for this story: John McCorry at jmccorry@bloomberg.net, Lynn Thomasson, Andre Janse van VuurenFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Zacks
B2Gold Reports Upbeat Results for Gramalote JV, Eyes Growth
B2Gold (BTG) believes Gramalote has the potential to become a large, low-cost open-pit gold mine.
- Reuters
Mali's new mining code sets "stability period" at 20 years
Under a new mining code, companies operating in Mali will be protected from fiscal changes for 20 years, down from the previous "stability period" of 30 years, the mines minister said late on Thursday. Mali had previously proposed a 10-year stability period. "We have to consider that the research phase can take at least seven, eight or nine years," said Mines Minister Lelenta Hawa Baba Bah.
- Zacks
New Strong Sell Stocks for January 13th
Here are 5 stocks added to the Zacks Rank 5 (Strong Sell) List today
- Zacks
AngloGold Ashanti is Overbought: Is A Drop Coming?
AngloGold Ashanti has moved higher as of late, but there could definitely be trouble on the horizon for this company.
- CNW Group
Zonte Metals Completes Non-Brokered Private Placement
Each Unit will consist of one common share and one-half (½) of one share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at a price of $0.35 until June 20, 2021 . If the closing share price of the common shares on the TSX Venture Exchange is greater than $0.50 per common share for a period of 20 consecutive trading days at any time following the issuance of the Warrants, the Company may accelerate the expiry date of the Warrants by issuing a press release announcing the reduced warrant term whereupon the Warrants will expire on the 30th calendar day after the date of the press release.
- CNW Group
Zonte Metals Increases the Size of Its Non-Brokered Private Placement
Each Unit will consist of one common share and one-half (½) of one share purchase warrant, with each whole warrant entitling the holder to acquire one additional common share at a price of $0.35 for a period of 18 months from the date of issuance. If the closing share price of the common shares on the TSX Venture Exchange is greater than $0.50 per common share for a period of 20 consecutive trading days at any time following the issuance of the Warrants, the Company may accelerate the expiry date of the Warrants by issuing a press release announcing the reduced warrant term whereupon the Warrants will expire on the 30th calendar day after the date of the press release.
- Zacks
New Strong Sell Stocks for December 30th
Here are 5 stocks added to the Zacks Rank 5 (Strong Sell) List today
- CNW Group
Zonte Metals Completes a $1.25 Million Non-Brokered Private Placement
In connection with the private placement, Zonte will pay finders' fees to Eligible Finders of $75,000 in cash, equal to 6% of the aggregate gross subscription proceeds received from the sale of securities from Eligible Finders; and will issue 250,000 Finders' Warrants. Each Finders' Warrant is exercisable at any time up to 18 months following its date of issuance to purchase one common share of the Company at an exercise price of $0.35 per share, subject to Exchange approval. If the closing share price of the common shares on the TSX Venture Exchange is greater than $0.70 per common share for a period of 20 consecutive trading days at any time following the issuance of the Finders' Warrants, the Company may accelerate the expiry date of the Finders' Warrants by issuing a press release announcing the reduced warrant term whereupon the Finders' Warrants will expire on the 30th calendar day after the date of the press release.
- GlobeNewswire
Appointment of New Chief Operating Officer
Patagonia Gold Corp. (“Patagonia” or the “Company”) (PGDC.V) is pleased to announce the appointment of Mr. Jorge Sanguin as Chief Operating Officer (“COO”) of the Company, effective January 1, 2020. Mr. Sanguin will succeed Mr. Leon Hardy, who was appointed COO on July 22, 2019. On August 14, 2019, Mr. Sanguin was appointed Operations Director of the Company and it was anticipated that Leon Hardy would step down in his role as COO to join the Board of Directors.
- Moody's
AngloGold Ashanti Holdings plc -- Moody's announces completion of a periodic review of ratings of AngloGold Ashanti Limited
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of AngloGold Ashanti Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
- Insider Monkey
Is AngloGold Ashanti Limited (AU) Going to Burn These Hedge Funds?
Many investors, including Paul Tudor Jones or Stan Druckenmiller, have been saying before last year's Q4 market crash that the stock market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the […]
- CNW Group
Zonte Metals discovers a large gravity anomaly at Dunns Mountain and a second at Big K
HALIFAX , Nov. 21, 2019 /CNW/ - Zonte Metals is pleased to announce the discovery of two large gravity anomalies and the commencement of drilling at the Dunns Mountain target on its Cross Hills IOCG project. Gravity anomaly extends under the magnetic anomaly and drill holes from Phase 1 did not test the area.
- GuruFocus.com
Sarah Ketterer Buys 5 Stocks in 3rd Quarter
The guru’s largest new holding is a REIT Continue reading...
- Reuters
Protest forces AngloGold Ashanti to suspend Guinea gold mine
South African miner AngloGold Ashanti suspended its gold mining operations in Guinea after a community protested on its Siguiri mining site, its Guinea subsidiary Societe Aurifère de Guinee (SAG) said in a statement. SAG had to suspend its operations to safeguard its staff and property, the company said. "There is a tacit agreement between SAG and the villagers [...] to tar this road," resident Moussa Condé told Reuters by telephone.
- Moody's
Growthpoint Properties International -- Moody's takes action on five South African corporates following sovereign outlook change
Dubai, November 07, 2019 -- Moody's Investors Service ("Moody's") has today taken rating actions on five South African corporates. These rating actions follow Moody's sovereign outlook change, on 1 November, of the Government of South Africa's ratings to negative from stable and affirmation of the Baa3 long-term foreign-currency and local-currency issuer ratings.
- CNW Group
Zonte Metals discovers a second gravity anomaly and commences drilling at the Cross Hills IOCG project.
HALIFAX , Oct. 29, 2019 /CNW/ - Zonte Metals is pleased to announce the discovery of a second large gravity anomaly and commences drilling at the K6 target on its Cross Hills IOCG project. The recently completed gravity survey was carried out over two separate areas; a southern block covering the K6 and K8 areas and a northern block covering the high priority Dunns Mountain target - Carols Hat area. As press released on October 8 , the Company announced the discovery of the K6 gravity anomaly.
- Reuters
UPDATE 2-AngloGold Ashanti's falling Q3 production, rising costs disappoint
South African miner AngloGold Ashanti said on Monday that it expects its full-year production will be at the low end of its forecast range after output fell in the third quarter from a year ago and costs rose sharply. Shares in the miner, which had rallied around 83% since the start of this year as the company benefited from surging gold prices, were down 2.9% by 1023 GMT after the sluggish production data. The miner said its output in July-September fell 3% from a year earlier, hit by lower ore grades at its Mponeng mine in South Africa, as well as a planned reduction in output at the Cerro Vanguardia mine in Argentina and at its open-pit mining at Kibali in Democratic Republic of Congo.
- Investopedia
Ready for Launch
Stocks closed at their old highs as bonds continue to lag, while gold is on the rise, lifting gold miners along the way.
- Insider Monkey
Hedge Funds Are Dumping AngloGold Ashanti Limited (AU)
How do we determine whether AngloGold Ashanti Limited (NYSE:AU) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows […]
