AngloGold Ashanti Q2 2026 Earnings Report

AngloGold Ashanti EPS Results

• Actual EPS: $1.98
• Consensus EPS: $2.03
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

AngloGold Ashanti Revenue Results

• Actual Revenue: $3.10 billion
• Expected Revenue: $3.20 billion
• Beat/Miss: Missed by -$96.00 million
• YoY Revenue Growth: N/A

AngloGold Ashanti Announcement Details

• Quarter: Q2 2026
• Date: 7/30/2026
• Time: Before Market Opens
• Conference Call Date: Friday, July 31, 2026
• Conference Call Time: 9:00AM ET

AngloGold Ashanti (NYSE:AU) (NYSE: AU) is a global gold mining company engaged in the exploration, development, and production of gold. Its activities include operating mines, processing ore into doré and bullion, and developing mineral resources and reserves. The company also conducts exploration and evaluation activities in areas with potential for additional gold discoveries.

The company has mining operations and projects across several regions, including Africa, Australia, the Americas, and other international markets. Its portfolio has included assets in Ghana, Guinea, Tanzania, Brazil, Argentina, and Australia, with operations such as Obuasi, Siguiri, Geita, Cerro Vanguardia, Sunrise Dam, and Tropicana. Its geographic footprint and portfolio may change as mines are developed, sold, expanded, or placed on care and maintenance.

AngloGold Ashanti was created in 2004 through the merger of AngloGold and Ashanti Goldfields. The company is incorporated in the United Kingdom and maintains its corporate headquarters in Denver, Colorado. Alberto Calderón has served as chief executive officer since 2022.

AngloGold Ashanti Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong financial performance: Q2 EBITDA rose 46% to $2.0 billion, headline earnings increased 58% to $1.0 billion, and free cash flow grew 36% year over year to $727 million despite lower sales volumes.
• Positive Sentiment: The company declared $949 million in dividends for the first half and is pursuing a potential $2 billion share buyback, pending South African Reserve Bank approval, while ending the quarter with nearly $1 billion in net cash.
• Negative Sentiment: Total cash costs increased 21% to $1,480 per ounce, driven by inflation, a 45% rise in Brent crude prices, stronger local currencies, and higher gold-linked royalties; Obuasi’s temporary suspension added further costs after a fatality.
• Positive Sentiment: Management reaffirmed full-year guidance and expects second-half production to rise about 6%, with Obuasi returning to a normalized run rate and cash costs declining as volumes increase.
• Positive Sentiment: AngloGold identified 300,000–450,000 ounces of potential production growth from existing assets, particularly Obuasi, Geita, Sukari, Siguiri, and Cuiabá, alongside the longer-term Nevada growth pipeline; management characterized these projects as low-capital and high-return.

Presentation

[Operator]

Good afternoon. Welcome to the AngloGold Ashanti Q2 2026 earnings release. All participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If you should require operator assistance during the conference, please key in star and then zero on your telephone keypad. Please note that this event is being recorded. I will now hand you over to Mr. Stewart Bailey. Please go ahead.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

Thanks very much, Judith. Good afternoon, good morning to everyone, depending on where you are, and welcome to our results for the second quarter and the first half of 2026. Alberto and Gillian will be presenting, but we have members of the executive team for any questions you might have. As always, we have a safe harbor statement at the front of the presentation, which has important information regarding forward-looking statements, and we would encourage you to read that. I'll hand over to Alberto.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thank you, Stewart. I will start with safety. You will remember from our Q1 presentation that we had a tragic fatality at Obuasi on April 24. We suspended operations for two weeks to undertake a thorough investigation into the incident, and we are taking the necessary and important steps to prevent a recurrence. This kind of event validates the effort and resources that we spend every day to improve our safety performance. We do remain proud of the enormous strides we have made over the past five years, as you can see. Before we go into the quarter, let's take a step back and look at the first half, which really, how are we doing after half a year? Production after stripping out the sale of Serra Grande was more or less stable year-on-year at around one and a half million ounces.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We had an exemplary cost performance again, managing controllable costs slightly lower in real terms. That is, if you strip away inflation, oil price, royalties, exchange rate, which is what we can control, we once more are below that level of controllables. Once again, you see strong growth in the EBITDA and earnings. Its comparisons are not usually nice, but probably we had the best EBITDA growth year-on-year of all of the large gold companies. Comfortably outstripping the rise in the gold price along with a more than doubling in cash flows. We made sure that shareholders both see the full benefit and see it right away with just under $1 billion in dividends declared over six months. It's been an extraordinary period by any measure.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

As we look to Q2, there was a production impact from both Serra Grande sale and the temporary safety suspension at Obuasi. On the positive side of the ledger, we had standard performances at Tropicana and Cuiabá. Total cash costs to the group were $1,480 per ounce. Once again, as with the half year, the macro context is critical. As I mentioned before, royalties, fuel, broad inflation, FX basically accounted for all of the increase. While this impact is driving cost inflation across the industry, our underlying operational discipline is firmly intact. That discipline is why our financial metrics are so strong. We've ensured that earnings and cash flow grow well ahead of the gold price. EBITDA was up 46% to $2 billion. Headline earnings were 58% better at $1 billion. You can see our cash flows remain robust. Cash generated from operations grew 49% to $1.8 billion.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

As we expected, cash taxes more than doubled year-over-year to $542 million. This reflects not only our improved profitability, but also the timing of payments across our operating jurisdictions. Importantly, it is a seasonal peak. As we start reading the analyst reports, I think that that's probably something that needs to be adjusted because, for example, we do expect cash taxes to fall to less than half of that $542 million, to about $230 million-$250 million in each of Q3 and Q4. That points to an even stronger cash conversion over the remainder of the year. We continue to transform the balance sheet. Liquidity is ample at $4.2 billion, underpinned by a net cash position of nearly $1 billion. To put that in perspective, we had a net debt position of $311 million just 12 months ago.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

This allows us to comfortably invest in our growth pipeline while ensuring our shareholders benefit from strong cash returns. This is an interesting graph. We could make this one since 2021, but right now you're seeing since H1 of 2024. As we look at the broader industry landscape, it's clear that external market-driven factors have fundamentally reshaped cost profiles across the industry. Every operator is navigating the same intense macroeconomic pressures, persistent inflation, fuel spikes, and the impact of higher gold price-linked royalties. Our approach is not to passively accept them. We are relentlessly focused on executing what we can control. This chart provides important historical context of our cost performance. The gray bars represent our normalized cost. That is what our total cost would be if we simply accepted market inflation and royalty hikes and nothing else changed.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Through active mitigation strategies implemented across our portfolio, we have managed to partially offset these macro factors. This is reflected in the orange parts, which represent the total cash costs we actually reported, proving our ability to consistently outperform these macro-inflated baselines. Through rigorous operational discipline and our Full Asset Potential program, we have successfully compensated not only for the increase due to these external factors, but also for normal changes in grade and mining further from infrastructure that is inevitable. Ultimately, by decoupling our controllable operating costs from these escalating market headwinds, we ensure that the full benefit of record gold prices flows directly to the bottom line, maximizing free cash flow and driving our sector-leading yields. Our Tier 1 assets are the core growth and cash engine of the group, accounting for over 70% of total production at an exceptional 71% cash margin.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

These assets hold approximately 80% of our mineral reserves, underscoring the structural long-term quality of our global portfolio. Our Tier 2 assets continue to serve as reliable cash generators, delivering a solid 58% margin with ongoing focus on operational discipline and cost competitiveness. This combined asset structure provides superior cash flow leverage to the higher gold price environment while maintaining the quality foundation needed to keep us firmly on track for full-year guidance. The high-quality portfolio we just walked through is not static. We are fortunate to have an emerging slate of low-risk capital efficient and potentially very high return brownfield and greenfield opportunities. These projects underscore what I've said repeatedly, while we always scan the landscape for value-adding M&A, the best opportunities for us lie within our portfolio. Nevada is anticipated to become a significant production center for the company in the early 2030s.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We're advancing to full feasibility study at Arthur. Even at our existing operation, we have options with the potential to add between 10%-15% to our current production profile in the next three years, all from our existing operations. There are various opportunities identified through leveraging our established strategic asset review and option analysis processes. Key operational focus areas include additional ore sources and processing plant expansions aimed at sustainably improvement on current production bottlenecks at Cuiabá, Geita, Siguiri, Obuasi, and Sukari. We are currently advancing high-value exploration opportunities, priority studies, and project implementations all along the pipeline with a new, more agile fast-track project framework. I will give a detailed update of these growth projects in Q3.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

This is what disciplined capital allocation looks like, taking part of our record free cash flow and reinvesting in its low-risk, high-return opportunities that will optimize the value we can deliver from our world-class ore bodies. We are pre-funding the health and expansion of these assets today, ensuring they remain highly profitable cash generators well into the next decade. On dividends, it is worth having a quick reminder of our dividend policy. It provides for quarterly payout of $12.5 a share. It also provides for an annual true-up payment, bringing the pay up to 50% of free cash flow. We again use discretion to make that true-up at the half year, underlining not only the extraordinary cash flow generation, but also our confidence in the outlook of the business. That takes our dividend declaration for the half year to $949 million, with $364 million declared in Q2.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

This remains one of the most generous yields in the sector. As normal, we expect a strong second half. When you look at our overall capital allocation framework, you will see it working precisely as intended. Our portfolio is well capitalized and is performing consistently to plan. Our balance sheet is the strongest it's ever been. We're delivering sector-leading returns with one of the industry's most attractive yields. We've shown an investor-forward approach with more frequent dividend payments. In April, we executed a buyback of our outstanding bonds, retiring $666 million of our 2028 and 2030 notes. That's another reduction in our longer-term financing risk and a clear improvement in our strategic flexibility. That position was willing to deploy excess liquidity into a $2 billion open market share buyback program. Shareholders approved the program last week, and we're now waiting approval from the South African Reserve Bank.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

If you step back, this is a business with a predictable operating base, an unrivaled project pipeline, and a balance sheet that will stand us in good stead in whatever market we encounter. With that, I hand over to Gillian.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Thank you, Alberto. We generated free cash flow of $727 million in Q2, a 36% increase over the $535 million reported in Q2 of last year. This was underpinned by a 41% year-on-year increase in net cash flow from operating activities to $1.4 billion, driven by disciplined cost execution and a 35% higher average gold price received. The upward pressure on cost for our industry were particularly acute this quarter. U.S. CPI escalated to 3.5% in June of 2026 from 2.7% 12 months earlier. The primary driver was the 45% increase in Brent crude prices, which led to a spike in our energy inputs. Australia was the clearest example, with inflation more than doubling to 4%, putting pressure on local labor and consumables. U.S. dollar weakness was matched by appreciation of our local currencies, creating strong cost headwinds. This currency-driven inflation is receiving aggressive focus on internal cost containment measures.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Our internal realized inflation rate, which represents CPI changes in the jurisdictions that we operate, is currently just under 6%. We're working to offset those cost pressures with our Full Asset Potential program and by adopting a Total Cost of Ownership supply chain framework, ensuring disciplined capital allocation by optimizing long-term asset performance. In our financials, the results show a significant rise in earnings and free cash flow. The increase in free cash flow is underpinned by higher realized price and improved cash receipts from Kibali. EBITDA rose 46% to $2 billion. Basic earnings per share rose 49% year-on-year to $1.97, up from $1.32 in Q2 of last year. As a result of this strong performance, we ended the quarter with net cash of $991 million, a $1.3 billion swing from June in the prior year.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Total cash costs increased by 21% year-on-year to $1,480 per ounce, compared to $1,226 per ounce in Q2 of 2025. We've been very clear on those exogenous factors driving the increase. Inflation, higher gold price linked royalties, and exchange rates collectively added around $216 per ounce or 18% to the cost base. The higher gold price meant higher revenue-linked royalty costs, while the 45% increase in oil price drove up our fuel costs across the portfolio. The suspension at Obuasi accounted for another $38 an ounce. In our managed operations, we saw the benefit of our Full Asset Potential programs, specifically our plant feed expansion program at Quebradona. Total cash costs for our managed operations increased by 20% to $1,486 an ounce. Through Full Asset Potential and other operational improvement initiatives, we continue to look for opportunities to improve efficiencies and protect our margins.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

On free cash flow, the higher price added $733 million, offset by lower sales volumes, which reduced it by $151 million. Increases in operating costs were largely driven by higher royalties, inflationary pressure, and the weaker U.S. dollar, partly offset by higher by-product revenues and lower costs related to legacy tailings facilities. It's important to note that earnings-related tax payments in Q2 2026 were the highest on record and are expected to be by some way the highest for this year. Capital spend stepped up as planned, while distributions to our non-controlling interests were $85 million year-on-year. We are pleased to again reaffirm annual guidance based on our stated assumptions, which underscores the robustness of our portfolio and the improving operational performance into the second half. We do expect a second-half-weighted production profile, particularly in Q4.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Production is expected to reduce slightly at Tropicana as open pit mining moves into the lower grade Havana 6 pit and at Iduapriem due to difficulty accessing temporarily flooded higher grade areas. Obuasi is running at a normalized run rate, with half two production expected to be 150,000 oz. We are keeping a close eye on developments in the Middle East to mitigate any impacts on our energy and global supply chains. With that, I'll pass back to Alberto to outline our relative market performance.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thank you, Gillian. We've not changed our focus. 2026 is about disciplined execution and controlling what we can control like we have done in the past five years. In a strong gold environment, discipline matters more, not less. Our aim is simple: protect margins, allocate capital rigorously, strengthen the portfolio. We remain laser-focused on cost discipline across the portfolio. With Full Asset Potential, we are systematically looking for ways to offset external pressures across the board. We're increasing the production contribution from our Tier 1 assets, which structurally lowers our cost base and improves margin resilience. Active portfolio management remains core. We've been active in this area and will continue to direct capital to assets that generate superior risk-adjusted returns. Sustaining capital is about protecting safety and reliability, as well as asset longevity and growth. We are appropriately capitalizing our assets to ensure safe, stable, and sustainable operations.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We continue to invest in mineral reserve development to increase operational flexibility, particularly in complex ore bodies. Reserve replacement remains fundamental. Sustained reserve growth underpins long-term value creation. Growth capital is focused on high-quality, long-life projects, particularly in Nevada. These projects enhance jurisdictional quality and portfolio resilience. We are creating flexibility for life extension and brownfield growth across the portfolio by building new tailings and opening land to extend our mining operations. We are prioritizing short-cycle, high-return organic projects that strengthen free cash flow generation. Operational excellence alone is not enough. Social and regulatory stability are equally critical. We remain deeply committed to our host communities and governments, where we're providing real-time benefit from the higher gold price through taxes, royalties, social investment, and meaningful participation in our value chain.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We've made steady progress narrowing the rating gap relative to our North American peers through a comprehensive multi-year plan to strengthen the business. Today, our fundamentals are robust, our portfolio is performing, and the higher gold price is flowing directly to the bottom line. This slide clearly illustrates our relative outperformance. The transparent bubbles represent where we and our peers sat exactly one year ago, while the solid bubbles show our position today. Over the last 12 months, you can see a sector-wide de-rating. For AngloGold over the past year, as you can see in the chart, we moved to higher dividend yield and a slightly higher EV to EBITDA multiple. All of our competitors saw the opposite. That is no accident for us. The market performance has followed our results.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

In fact in Q2, we generated a sector-leading 36% year-over-year growth in free cash flow per share, outpacing the peer group. In the end, that is what matters. We're close to the bottom line to free cash flow. Some peers have built significant net cash positions, our capital allocation ensures we pass this strong cash generation directly to shareholders. These elevated gold prices hold, we are focused on realizing our operational catalysts, managing cost aggressively, and delivering on our buyback program. That clear focus, we believe AngloGold represents the most compelling investment proposition in the sector today, with significant embedded upside. That, I will hand over to this operator for your questions.

[Operator]

Thank you. Ladies and gentlemen, we will now be conducting the question-and-answer session. For the benefit of the participants who have joined via the webcast, you're welcome to submit your questions in the question box provided on your screen. For the benefit of the participants who have joined via the telephone lines, to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star and then two to leave the question queue. Our first question comes from Josh Wolfson of RBC. Please go ahead.

[Josh Wolfson, Analyst at RBC]

Thank you very much. Alberto, we had a lot of questions on the last call on the buyback enhancement. Many of the details couldn't be disclosed. This now approved, can you provide me a bit more information on how the company's looking to leverage this? Is it going to be opportunistic purchases, more stable,

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We're still waiting for the Reserve Bank, and then we see.

[Josh Wolfson, Analyst at RBC]

Got it. Thank you. Then, you know, on our end, we're very excited about this upcoming organic growth update. The company's issued some details, at least at Geita. We kind of know the outlook for Obuasi. When we think about the other assets that were identified, Sukari, Cuiabá, and Siguiri, is there any more information you can provide, maybe early expectations there? Also, what should we be thinking about the capital needs for some of these opportunities?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thank you, Josh. Look, I've sort of resisted because I want to give what I've said. The next quarter is going to be, I would imagine with, I know, significant detail per asset of what we expect to see in three years and probably before that. Obviously, we've continued to work. There's a whole team, let's say, that has been assembled in the corporate with an SVP. That's equivalent to the head of Africa, so it's a pretty senior position. In that group, you have planning people, you have supply people, you have finance, you have HR people, you have projects people. So they're looking at each one of these. The cost is not high. Probably it's where we have the processing plant in Geita, there's going to be a bit more cost.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

In Sukari, it's basically equipment, trucks and shovels and things like that, and exploration. In Cuiabá, we will be looking for bringing ore from other places, but it's pure mining. Cuiabá, we'll see if it's between maybe 75,000 oz or something in three years that we're looking for. Siguiri, it's again, pure mining. We've identified the areas. We, again, need to do a bit more brownfield, but the initial estimates sort of solidify, strengthen our view that this is going to be just more of mining open-pit. There's not issues. We need to do some issues of license to operate with resettlements, but nothing that we will see is going to be an issue within the next three years. Look, what I can tell you right now, we've given a guidance between of 2025 baseline, so about 3 million ounces, and between 300,000 oz and 450,000 oz.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

The more we see, I think that we're going to be in that range and what we will be talking in Q3. Low CapEx. Interestingly enough, and this is important, what you see in the growth CapEx and sustaining CapEx right now in this quarter is already contemplating the money to achieve that growth. For example, you will see in the growth capital, $120 million from memory for TSFs in Obuasi, and TSFs in Siguiri from memory. Those two are needed as we grow the ounces. You are also seeing money on sustaining for stripping, money on sustaining for ORD, and that is all preparing the terrain. We've started to spend within, apparently with normal course of business, but it's within this laying the groundwork to materialize these growth projects. Again, it's not that we're going to only see the growth in three years.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We should start Significant more resources to finish this.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

The board, we have the funds to start the feasibility study now in August. That's what we've been focusing on. Everything else is working according to plan. Thank you.

[Josh Wolfson, Analyst at RBC]

Great. Thank you very much.

[Operator]

The next question comes from Adrian Hammond of SBG. Please go ahead.

[Adrian Hammond, Analyst at SBG]

Thanks, operator. Hi, Alberto and Gillian. Just talk about capital allocations, if you may. Your target for $1 billion cash buffer is largely achieved. Does this assume then you pay out all future free cash flows, or are you going to build further cash buffers here in light of your growth aspirations?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thanks, Adrian. No, the plan is to find a way to return that cash. At this stage, our plans is to build that $1 billion. As I look at it all depends on the gold price, but if you believe that the gold price is staying where it is, we should double the free cash flows.

[Adrian Hammond, Analyst at SBG]

Yeah.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

You can just remember, let's say it's $3.8 billion, that's $1.9 billion we're returning of dividends. On the other $1.9 billion, we use $666 million, close to $700 million for the repurchase. You can see that if we keep $1 billion, there's going to be more upside that will return one way or another.

[Adrian Hammond, Analyst at SBG]

Okay, great. If we can talk about Obuasi. You've mentioned three issues, including equipment breakdowns, availability, operational delays. Every six months, it seems to be something unfortunate there at Obuasi. Do these issues, are they temporary, or do you think these risk to ramp up there?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

I think the main issue was the fatality. Before the fatality, the first quarter was fine, and we were heading towards delivering on our target for the year, which was between 300,000 oz and 350,000 oz, something like that. We would have done that. As you know, the fatality in an ore pass, the way it happened, really obliged us. We had an obligation to deeply understand why it happened, how it happened, and what we needed to do to avoid this. We also had a catastrophic failure in the system again. That impacted us not only in the weeks that we had operations closed, but for example, we're not using those ore passes right now. Basically we're operating without the KM Shaft. Even without that, we expect to have an annualized 300,000 in the second half.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We do expect to bring everybody back to normality, including the ore passes. We're building another ore pass, because remember all of the gate that you use to control the flow of the ore pass was completely destroyed. We are building another ore pass that should be ready by the fourth quarter. That sets well the groundwork to deliver on the 2027, which was around 325,000, 350,000 or something like that. That's where we are preparing ourselves to, and we are thinking, again, that mostly without the KM Shaft, we will do around annualized 300,000 in the second half of the year.

[Adrian Hammond, Analyst at SBG]

It's clear. Third question, perhaps for Gillian on the realized gold price versus market averages. They seem to be quite apart. Is this just timing, or should we think there's a reason for this, such as the potential discounts that you're required to sell gold to Ghana and Tanzanian authorities?

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Well, thanks, Adrian. It's exactly timing. You will know that there was quite a lot of volatility in gold price change in Q2. We saw the highest drop actually, since 2013. It's effectively the timing of sales. Our realized price was $90 an ounce lower than the kind of consensus or the spot price for the quarter. It is related to timing. The other thing, we've got very small amounts of concentrate sales still, in Brazil, 36,000 oz. That's a small premium or discount on the gold price, but otherwise nothing impacting us achieving market prices.

[Adrian Hammond, Analyst at SBG]

Thanks, Gillian. While you're on the line, just I noticed your working capital outflows have improved quite considerably.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Yes.

[Adrian Hammond, Analyst at SBG]

Do you think that'll reverse completely at all at 2H, or is this going to be something where we should expect a steady balance going forward?

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

No, I think thanks, and thank you for recognizing the achievement. The team is so focused on working capital. We're not anticipating any lumpiness in the second half. Of course, as your receivables are higher based on gold price, maybe there's some movement there. But we are laser-focused on working capital and don't anticipate any lumpiness in the second half.

[Adrian Hammond, Analyst at SBG]

Thanks.

[Operator]

Next question comes from Raj Ray of BMO. Please go ahead.

[Raj Ray, Analyst at BMO]

Thank you, operator. Good morning, Alberto, Gillian, and team. A couple of questions. First off, a follow-up and more clarification on Adrian's question on the buyback. Am I correct in understanding that in periods where you pay 50% of your free cash flow as dividend, you're still willing to go above that for share repurchases? Your total capital returns could be higher than the 50% of free cash flow. Is that correct, Alberto?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

That is absolutely correct.

[Raj Ray, Analyst at BMO]

Okay.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

If the gold price stays where it is today, that will be the case.

[Raj Ray, Analyst at BMO]

Okay. Thank you. Then a second question is the comment you made on the growth coming in the portfolio over the next few years. Can you comment on what it does to your capital intensity? Are you happy with your sustaining and non-sustaining capital intensity at these levels as you deliver on those growth, or is that expected to increase?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

No. Look, I would say it's going to be stable for some years. We are doing about $480, something like that, per ounce. Which you look at other, like Barrick, I think it's double. They're not investing anything. We have, yeah, a very important growth pipeline within our own organic assets. Yeah, you need to invest in it. We expect to stay where it is, high for some years, but not go higher than that.

[Raj Ray, Analyst at BMO]

Okay. That's great. Thank you. Yeah, that's it from me.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thanks, Raj.

[Operator]

Our next question comes from Joseph Reagor of Roth Capital Partners. Please go ahead.

[Joseph Reagor, Analyst at Roth Capital Partners]

Hey, guys. Thanks for taking the questions. Two items I don't think have been touched on yet. At first with Siguiri, there was this announcement that the government's going to force the flow of gold through their refinery. Has this occurred to you guys with Siguiri and, you know, is there any impact from that going forward?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thanks, Joseph. Yeah, we are in conversations with the government. This is something that we have seen elsewhere, and we've worked with the governments like in Ghana. It's just about I think they gave three months. We believe we will find a way of how to deal with it. We understand the asks and of wanting to have more local adding value. We will, again, talk to the government and ways to deal with that. At this stage, I don't want to comment more except that we believe that it's something that you can address within almost business as usual. Business as usual means it's not any significant thing. We just need to outreach to how do we do this with the government. We have a lot of, I would say confidence.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

The Minister of Mines is probably, is very knowledgeable of the industry, understands what we are, the needs of the industry. We expect to continue constructive conversations on this front.

[Joseph Reagor, Analyst at Roth Capital Partners]

Okay. Fair enough. Iduapriem cash costs rose pretty significantly quarter-over-quarter. Looking at grades and throughput, et cetera, it doesn't seem like there's any meaningful justification for it. Is there some color you guys can give there on what caused that, and if it's sticky?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

I will tell you. It is related. There is a particular significant hit on this quarter on the royalties increase. That's it. If you look at Iduapriem in terms of for the quarter, in terms of what we call flex costs, which is including royalties and fuel price and everything, we sort of are flat. That is important. The other interesting thing that I can note, if I look at the outlook for the year for Iduapriem, we're going to be, again, flat in terms of the flat cost. That royalty impact is reduced. Let me just say one more thing, which is important. What the government did was increase the royalty. Right now the increase impact is 5%, but they reduced the COVID levy by a net impact of about 2.6%. That you don't see in net actuals, you see in taxes.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

There is a significant mitigation that you see below the line. All in all, the sum is Iduapriem is doing well on cost. There was some increase in mining contractor, but the bulk of it for the quarter was the royalties impact.

[Joseph Reagor, Analyst at Roth Capital Partners]

Okay. Thank you. That's very helpful. I'll turn it over.

[Operator]

Our next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.

[Tanya Jakusconek, Analyst at Scotiabank]

Oh, great. Good morning, everybody. Thank you so much for taking my questions. The first one is just a clarification, if I can, Alberto. I understood from Doc and others that for that 300,000 oz-450,000 oz growth from your portfolio, that's going to come at less than $100 million of capital. Really not any additional change to the $480 per ounce of sustaining capital. Is that a correct way for me to think about that?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We will give you more details. The $100 million, we've never talked about that. What I've said is overall, we don't expect the sustaining CapEx numbers to increase. The other thing that I've said is that all of the projects, I think most of them is going to be I don't have the numbers yet, but it's going to be nothing significant in the scheme of things. They're very high IRR projects. Of course, if you need to buy more equipment in Siguiri and you need to buy more mining equipment in Sukari, that's just going to come at a cost. I don't know how it's going to flow in exactly in the numbers. It is nothing like you're going to have in billions of dollars that you have to do an expansion.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

There will be no other projects that are as high IRRs as this was. That's the point I'm trying to make. In the Q3, we will give probably some more detailed estimate of what we're assuming. Most of it is just more mining and the cost that are involved with that.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay. Sorry, I heard a $75 million number that was put out. I think you mentioned it earlier. I thought that was for everything. Sorry, maybe it was my misunderstanding. Okay. That was my first clarification. Thank you for that. The second I wanted to focus on was on your costs. I appreciate that the higher gold price impacts the royalties, the higher fuel price impacts the cost as well. Can you maybe just talk about some of the other inputs that maybe you are feeling some inflationary pressure on? Maybe it's labor, maybe it's consumables. Are you seeing anything in those areas that are also impacting your costs?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thanks, Tanya. Probably the number I didn't mention was 75,000 oz additional in Cuiabá. I don't know if that's what I didn't say. It wasn't millions, but ounces additional in Cuiabá. Look, in terms of the costs, the inflation impact in the half year is a bit larger than what we Usually it's been 5%. It's about 5.8%, and this is excluding the fuel price. The fuel price, it's about on the half on half, it's about $20 an ounce. It's not significant, but everything adds up to it. When you look at the impacts, and this I'm talking again, half on half year, you're having about $60 on inflation, you're having about $23 in fuel price and exchange rate about $46, you have the impact of the royalty that is significant.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

That all adds up to a flex cost that is a bit higher than what you see in the numbers. If you go to our costs for the half year, cash cost is $1,436. The flex cost is a bit higher than that. Which means that we've been able to lower a bit versus the flex cost. I don't know if that's helpful.

[Tanya Jakusconek, Analyst at Scotiabank]

I'm just wondering, is it labor? Is labor an inflationary above the 3%-5% in your portfolio? I'm just trying to understand, excluding that fuel and royalties, what else is this overall inflation. Just trying to understand it. I know you've reduced on your productivity and optimization of assets separate from this, about 2%, so you're gaining a little bit there. I'm just wondering where else am I seeing those pressures.

[Gillian Doran, CFO and Executive Director at AngloGold Ashanti]

Maybe, Tanya, I can just say that we're not seeing anything out of the ordinary in terms of inflationary pressure within the jurisdictions that we operate, particularly around labor. What we would say is it's a relatively fixed cost business, especially in the short-term. Yeah, if you look at the volumes and the cost base, you can see that it's those primary drivers for the costs are the macro factors that we are trying to manage as best we can. There's nothing outside of that that we would highlight as an issue for us. We are again expecting really quite strong cost performance in the second half in line with the sort of volume profile that we are anticipating.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

I'm not going to say whom, but we have heard others talking about extraordinary costs and you see the impact. We haven't seen that. That's just a point in mind.

[Tanya Jakusconek, Analyst at Scotiabank]

Well, that's good. My final question, Alberto, to you, when you put up a slide and you showed your Tier 1 portfolio, which has a nice production of over 500,000 oz, great costs, then you have your Tier 2 that obviously brings up the cost structure. How do you think about that Tier 2 portfolio? Like if you always hindsight 2020, if you didn't have that portfolio, would you theoretically trade higher valuation with that cost base. I just kind of think of, I wonder how you're thinking about those Tier 2 assets. What makes them important to stay within the portfolio? Maybe just review the separation upside, maybe think we can mine life. I'm just trying to understand why they're important.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Tanya, it's interesting. We were at some point trying to sell one of the assets that was Tier 2, at these gold prices, it's impossible to get the right value because it's sort of in nature that a lot of the offers come like at consensus pricing and with very conservative views of the gold price in two or three years. If we value them at futures, they're valued much, much more. It was not a secret that we were trying to sell the CVSA. I can tell you, the cash flows for this year are like 60% of what we are going to receive by selling it. What we now have in our Tier 2 assets is, and the only one that is not working that well and is improving is Sunrise, and you see in the performance.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Again, talk about CVSA, it's working like a little charm. It's increased its life from 3-5 years. Silver obviously is now a by-product and it's a blessing in CVSA, but the free cash flow it's generating is amazing. We have no rush to dispose in the current environment of Tier 2 assets. Different was the case, for example, of Serra Grande that was just too small, and it drew on a lot of management time for the money that it produced. We're happy to have disposed of that one. The rest, we're very happy to keep it. You have assets like Siguiri that are turning and will turn into Tier 1. At this stage, we're quite happy with our nine operating assets. It's a footprint that we can manage easily.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We will see in the future what happens, for now, we're quite happy with that nine operating assets.

[Tanya Jakusconek, Analyst at Scotiabank]

Okay, great. Thank you for taking my question.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Pleasure, Tanya. Thank you.

[Operator]

Thank you. Ladies and gentlemen, at this stage, I will hand over to Stewart Bailey for questions from the webcast.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

Thanks, Judith. The first question I'll ask is from Arnold van Graan at Nedbank. He says, Afternoon, team. Solid results and proper long-term delivery.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Yes.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

My question is, where do you see the most compelling near-term growth optionality in the portfolio? Also, please talk us through your risk-adjusted return methodology. Are you seeing good projects in certain jurisdictions that fall short once you add the risk component to your assessments?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Oh, that's an interesting question. Look, the near-term optionality is in those five assets that are the core of the gold portfolio. Obuasi, Geita, Sukari, Siguiri, and Cuiabá. As you said, there is a lot of focus of attention even with a centralized team. Even though it will be delivered by each of the assets, we want to understand what are the bottlenecks, what do we need to do, what we need to do in brownfields, what we need to do in license to operate, what we need to do in TSF, what we need to do in communities, and have a very clear, centralized view of that. That's what we're working on. Those are the best near-term optionalities that we have, and those are the ones that we are working and to present in Q3.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

The risk-adjusted returns, we do have different discount rates, obviously, for each. Even though we have a company-rated one, we have a different risk-adjusted return. They all, for example, these growth projects in different areas in Africa, they will all have to face the hurdles. Now, what I've said is they are so profitable that with all of that risk, because it's little investment to a significant impact in the growth. Take whatever in Siguiri, if we go from 300,000 oz-350,00 oz or 375,000 oz that's a 50% like that, I'm sorry, what would be 20% increase in the production and with very significantly little capital. Even though we do explicitly do risk-adjusted returns, they are way above any hurdle that we have for investment.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

All right. Thanks for that, Arnold. The next question is from Robert Kellaway, who says, Please update on the connection of Sukari to the Egyptian national grid in light of the operation's heavy dependence on HFO fuel generation. Robert, just very quickly, the feasibility on that 80 MW grid connection is almost complete. We've got all the regulatory approvals we need. All going well, we're looking at commissioning early in 2028. The work to do between now and then is just to make sure that there's certain upgrades to the grid just to ensure stability once that's connected. Just for the meantime, remember, we do have the 30 MW solar facility there that's working like a charm, so no problems there. Alberto, one other from Martin Creamer, which is, just your thoughts on AI.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

Are we using any in the business for exploration or for safety, do you think it can improve efficiency?

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

I think we can ask Marcelo, who's the expert on that, we are using AI. Give us some, Marcelo, of your wisdom on that front.

[Marcelo Godoy, CTO at AngloGold Ashanti]

Look, we have been implementing AI across the organization for quite a long time, especially machine learning, which we have been using for predictive maintenance, for process control and other activities around the mine. We also have a program to increase proficiency of AI across groups. We have selected a single provider, blocked everything else, and now our technical teams and operating teams have access to generative AI, for general tasks. We are not in the era of generative AI. We have some proof of concepts going on, given the security issues that we have with that type of technology, we are taking a very cautionary approach to deploying that type of technology.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

Thanks

[Marcelo Godoy, CTO at AngloGold Ashanti]

We are very advanced in our adoption across the group generally. Yep.

[Stewart Bailey, Chief Sustainability and Corporate Affairs Officer at AngloGold Ashanti]

Great. Thanks, Marcelo. I think that's it from the webcast, and we don't have any other questions on the line. Alberto, if you'd give us a closing remark before we wrap up.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

Thank you. Okay. Yes, look, mining, I always say it's a normal curve without the right-hand side. There's always issues. This one was particularly difficult. The fatality of Obuasi impacted us in many, many ways. Apart from that, which is very bad, apart from that impact at Obuasi, we have some impact in San Luis. The portfolio effect, Tropicana doing much better and many others, leads us to relatively stable production in the first half. We expect in the second half if things go as expected, and that's always an if, we wouldn't have any additional surprises to have an increase in the second half by about 6%. That will also lead to, we expect cash costs in the second half to actually go down versus the first half just because of higher production, obviously higher denominator, and that will flow well.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

The other thing that I'd like to highlight is the free cash flow, because in the end, you can talk about cash cost and who's better. You can talk about it sustaining, you can talk about all-in costs, in the end, what matters is what flows to the bottom line. We do exceptionally well there. Our increase in the half of 36% higher than anybody else, much higher than most of them, is something that we are proud of. This is in spite and something that we have prepared for the questions, none came, which was the tax thing. We had an unusual lumpy tax in the second quarter of about $540 million.

[Alberto Calderon, CEO and Executive Director at AngloGold Ashanti]

We expect half of that in Q3 and half of that in Q4, which by definition, if the gold price stays where it is today, should significantly improve the free cash flow in relative terms, in Q3 and Q4. We are very comfortable where we are. We expect, as we said, to be comfortably within guidance, and we expect to keep making the most of this high gold price environment in terms of what we can deliver, to our shareholders. We were clear that it's going to be if the gold price was to stay where it is, above the 50%. We are already in the $1 billion of net cash. We're looking very much forward to a strong second half in all fronts, obviously with a little grace from God that you always need. Thank you.

[Operator]

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines

Participants

Executives

• Stewart Bailey, Chief Sustainability and Corporate Affairs Officer
• Alberto Calderon, CEO and Executive Director
• Gillian Doran, CFO and Executive Director
• Marcelo Godoy, CTO

Analysts

• Josh Wolfson, Analyst at RBC
• Adrian Hammond, Analyst at SBG
• Raj Ray, Analyst at BMO
• Joseph Reagor, Analyst at Roth Capital Partners
• Tanya Jakusconek, Analyst at Scotiabank