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AngloGold Ashanti delivers record free cash flow* of $1.2bn

and EBITDA*(4) of $2.3bn • Gold production(1)(2) +1% • Net cash*(4)

of $868m • Q1 2026 interim dividend of $585m, or 116 cps

• Proposed $2.0bn share repurchase programme announced

https://thevault.exchange/?get_group_doc=143/1778224657-Q12026-EarningsReleaseReport.pdf

PART 2 OF 2

A 10% to 20% drawdown in the S&P 500 combined with higher oil prices creates a "Stagflationary Shock" scenario. For a gold miner like AngloGold Ashanti (AU), this is a double-edged sword: it drives the top-line revenue through safe-haven demand but pressures the bottom-line through rising energy costs.

Here is how AU typically behaves in this specific environment:

1. The Correlation Shift (The "Ballast" Effect)

Historically, gold miners have a low-to-negative correlation with the S&P 500 during major drawdowns.

• Psychological Hedge: As of March 2026, gold has functioned as a "strategic ballast." When the S&P 500 drops 10%+, investors typically rotate out of overvalued tech/growth stocks and into "hard assets."

• The Dividend Yield Trap: In a 20% market crash, AU’s ~4%–5% dividend yield becomes incredibly attractive compared to broad equities. This yield acts as a "valuation floor," preventing AU from falling as far as the broader market.

2. The Impact of Higher Oil (The Cost Squeeze)

Oil is the single largest non-labor cost for gold miners (fueling heavy machinery and power generation at remote sites).

• AISC Inflation: AU's All-In Sustaining Costs (AISC) for 2026 are guided at $1,780–$1,990/oz. If oil stays above $100/bbl long-term, you should expect AISC to drift toward the upper end ($1,990+) or even slightly exceed it.

• The Margin Buffer: Fortunately, with gold near $5,000, AU’s margin is currently ~$3,000/oz. Even if oil prices double, the impact on the margin (roughly $50–$100/oz) is negligible compared to the massive revenue gains from $5,000+ gold.

3. Scenario Analysis: S&P Drawdown vs. AU

Scenario Market Context Impact on AU Price

10% S&P Drop "Healthy Correction" - Investors seek mild safety. Stable to +5%: AU often "zigs" while the market "zags," benefiting from the flight to safety.

20% S&P Drop "Bear Market/Panic" - Liquidity crunch. Initial -5% then +15%: In a true panic (like March 2020), everything is sold initially for cash. However, gold miners are usually the first to rebound as central banks signal rate cuts.

The "Stagflation" Winner

If the S&P 500 drops because of high oil and high inflation (Stagflation), AU is fundamentally one of the best-positioned stocks in the market:

1. Revenue Growth: Inflationary fears drive gold higher.

2. Debt-Free: AU’s $879M Net Cash position means they aren't hurt by rising interest rates (unlike most of the S&P 500).

3. Real Asset Value: In a currency-debasement environment, "gold in the ground" is perceived as safer than "earnings in a spreadsheet."

Summary Verdict

A 20% S&P drawdown would likely see AU outperform the index by 25%–30%. While its costs (AISC) would rise due to oil, the "Safe Haven" premium on its shares would far outweigh the operational inflation.

GOOD LUCK DYOR. I'M A BUYER SUB $95

PART 1 OF 2

The recent drop from $127 to $95 (a ~25% correction) is a classic "gold miner's shakeout." While gold prices have pulled back from their January/February highs of $5,600 to sit around $5,010 today (March 17, 2026), the fundamental earning power of AngloGold Ashanti (AU) remains largely intact.

Here is the updated fair value analysis based on the current $5,000 gold floor.

1. Why the price dropped to $95

• The "Ex-Dividend" Effect: AU went ex-dividend on March 13, 2026, for its record $1.73/share payout. Stock prices naturally drop by the dividend amount on that date.

• Sector Rotation: With US 10-year Treasury yields pushing 4.3%, some "hot money" shifted from non-yielding gold miners back into bonds.

• Profit Taking: After a parabolic 194% run-up over the last year, institutional investors (like Oaktree Capital) have been "trimming" positions to lock in gains.

2. Updated Fair Value (Gold at $5,010)

Metric Bear Case Base Case (Fair Value) Bull Case

Share Price Target $88.00 $126.00 $164.00

P/E Multiple 16x 24x 30x

Gold Price Assumption $4,500/oz $5,000/oz $5,600+/oz

The Base Case ($126.00) - "The Multi-Year Anchor"

At $95, AU is trading at roughly 18x Earnings, which is a significant discount to its peer Agnico Eagle (~28x). The consensus among analysts (JPMorgan, Scotiabank) is that a fair multiple for AU's new "low-debt, high-FCF" profile is 24x.

• Calculation: If AU delivers on its $5.19 EPS guidance, a 24x multiple yields a price of $124.56. This suggests the stock is currently ~30% undervalued at $95.

3. Thesis Check: Is it still a "Buy"?

The investment thesis hasn't broken; it has simply "cooled."

• The Dividend Support: Even at $95, the forward dividend yield is north of 3.6%. In the mining sector, a yield that high—backed by a net-cash balance sheet—usually prevents the stock from falling much further.

• Nevada Optionality: The market is currently giving "zero value" to the Arthur Gold Project exploration upside at $95. Any positive news from the Nevada DFS (Definitive Feasibility Study) in Q2 will likely act as a spring for the share price.

• Insider Signals: While CEO Alberto Calderon recently sold shares, filings indicate these were largely for tax liability management related to vested stock options, rather than a lack of confidence in the $120+ price level.

Technical "Floor" Watch

Technically, the $92.00–$95.00 range is a major support zone (the 100-day moving average). If the stock holds this level through the Fed meeting (March 18), it likely marks the "bottom" of this correction.

AngloGold Ashanti’s Liquidity Position Strong.

The company generated a record $920 million in free cash flow in the third quarter, a 141% year-over-year whopping rise. The adjusted net debt to adjusted EBITDA ratio improved to 0.09X in the third quarter from 0.37X in the year-ago quarter. AngloGold Ashanti ended the quarter with $3.9 billion in liquidity, including cash and cash equivalents of $2.5 billion.

AU’s Gold Production Outlook Upbeat.

Gold production for 2025 is projected at 2.9-3.225 million ounces. This suggests year-over-year growth of 9-21%. For 2026, the company expects similar output levels to those in 2025.

AngloGold Ashanti Focuses on Long-term Growth.

AU is executing a clear strategy of organic and inorganic growth. The acquisition of Egyptian gold producer Centamin in November 2024 added the large-scale, long-life, world-class Tier 1 asset, Sukari, to its portfolio. It has the potential to produce 500,000 ounces annually. Sukari has already established itself as a top producer in the company’s portfolio and added 129,000 ounces and 135,000 ounces of gold in the second and third quarters of 2025, respectively.

The company closed the Augusta Gold Corp acquisition on Oct. 25, boosting its footprint in the Beatty District of Nevada, which is in one of the most significant emerging gold districts in the United States.

The company is also moving forward with its investment strategy, with additional capital expenditure approved for this year at its Geita Gold Mine in Tanzania. AU has also planned investments of $100 million over the next three years for the expansion of the mine. The company will raise annual exploration spend at the mine from around $35 million to $50 million. The ongoing investment aims to increase Geita’s mineral reserves by 60%, which will extend the mine life from seven years to at least a decade by 2028.

Obuasi remains a significant pillar of its long-term strategy, which is expected to deliver 400,000 ounces of annual production at competitive costs by 2028. At the Siguiri mine, efforts are underway to improve mining volumes through ongoing improvements to fleet availability and utilization, and to introduce gravity recovery in the processing plant to further improve metallurgical recovery.

Apart from these factors, AU is gaining from the increase in gold prices in 2025. Gold prices have increased 54.5% year to date. The metal has been supported by geopolitical tensions, tariff concerns and continuous purchasing by central banks. Gold prices are currently trending above $4,200 per ounce, backed by expectations of further interest rate cuts.

Reply from ii, not fully owning up to their mistake.

Dear MR CHAMBERS,

Please accept my apologies. Having looked into it deeper I think you might be right here. One of our data sources shows the payment as being split between 12.5 cents interim and 67.5 cents, and if you go to the company's Q2 Earnings Report (link below), at the bottom of the first page in the right column it says the following, which does differentiate the 12.5p portion from the "balance" (i.e. the 67.5p portion). "An interim dividend of 80 US cents per share was declared for Q2 2025, which includes the minimum quarterly dividend of $63m or 12.5 US cents, with the balance reflecting our decision to pay half of free cash flow* generated for the six months through to 30 June. While our dividend policy commits to this ‘true up’ payment to 50% of free cash flow* annually at year-end, the Company’s board used its discretion to make the payment at the half year given the strength of cash flows and its confidence in the outlook.". But they don't actually refer to the balance as a special dividend as such. That doesn't mean it isn't a special dividend of course, but I'm not sure at this point. I wouldn't necessarily trust Anglogold Ashanti's main dividends page that you sent me the link to, because in my experience companies quite often simplify things on their Dividends page rather than give the full picture. But it still looks odd. And ultimately, whether it's split or not you're still due 80 cents per share.

Financial results - AngloGold Ashanti

I can confirm that all we've received from our international sub-custodian so far is the 12.5 cents portion which is what we paid out because it matched our data vendor information (in the sense that they were showing the overall dividend as being split between two payments), but we're contacting our custodian to query this. Whether it's paid as one payment or split in two they would normally send both at the same time, so it's a little strange that they haven't done this.

As soon as I'm able to give a fuller response I will do, although the way these things work there's every chance that we'll receive and pay the other 67.5p before we actually get an answer back from the sub-custodian.

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