Cerro Vanguardia in Argentina’s Patagonia is not the easiest place to mine gold: think Karoo, but windier. Steppe grasses cover implacable flatness, and wildlife, in the form of guanaco — a slender relative of the llama — wander through the scrub.
Two years ago, the mine, which is known as CVG by its owner, AngloGold Ashanti, was ripe for sale owing to its relatively small contribution and fast-diminishing mineable gold. Even in AngloGold Ashanti’s latest interim results report (ended June) CVG is a minnow. It comprised 6.5% of the group’s 1.47-million ounces in gold output.
Notwithstanding these limitations, AngloGold’s regard for the mine (actually a cluster of closely connected pits) has completely changed. CEO Alberto Calderon told analysts this month that an offer to buy the mine from a third party had been 60% matched by the operation’s free cash flow in the 2025 financial year.
Behold, the transformative power of today’s gold price, 119% higher over three years. For CVG, it means its place in AngloGold is safe, at least for now; even its life of mine has been increased to five from three years. “It’s working like a little charm,” Calderon purred.
CVG’s production of silver has added an extra sheen. The emergence of byproduct credits — a fact of the near synchronous improvement in precious metal prices — is actually an industry-wide phenomenon. Anglo American recently said it earned about $657m in revenue from byproducts, predominantly silver, owing to the metal’s 60% price gains in the past 12 months. For primary silver miners, operating cash flow increased a record $4.9bn year on year in 2025, according to data from UK precious metals consultancy Metals Focus.
It’s a similar picture for AngloGold. Its byproduct revenue increased 105% to $152m in the first half of 2026 “mainly due to a stronger silver price”, AngloGold states in its published numbers. Of this, $138m sits in the Americas segment, with CVG the main silver-bearing mine. It’s clear where the metal boost came from. “Silver is now a bigger contributor; it’s a blessing, and honestly, the free cash flow it’s generating is amazing,” says AngloGold CFO Gillian Doran.
But there are wider, sectoral implications in the little mine’s turnaround, offering a window into the difficulties of gauging value in today’s elevated gold equity market. Calderon says it is proving “impossible” for acquiring companies to “get the right value” on assets such as CVG, because they base valuations on consensus pricing “with conservative views of the gold price” over the next two or three years. By contrast, AngloGold values its assets on future pricing, he says.
There are other mines like it in the portfolio. Siguiri in Guinea is also in a turnaround phase. Calderon describes its cash flow as “amazing”. Rarely have analysts heard Calderon — an economist by training — so glowing in his choice of adjectives. “We’re in no rush to dispose of them in the current gold price environment,” he says of the once noncore mines. “At this stage, we’re quite happy with our nine operating assets,” he says. “It’s a footprint we can manage easily. We’ll see what happens in future, but for now we’re quite happy with those assets."
All gold equities have performed well this year, largely owing to a monster rally in the last week. Even before then, with the gold price off a fifth from its January peak, the stocks held value. AngloGold’s performance includes a $2bn share buyback, to be implemented over five years, as recently approved by shareholders, though controversially opposed by proxy advisory ISS. On a yield basis, AngloGold’s recently upgraded dividend policy makes it high ranking: about 4.5%, compared with the top-ranking Gold Fields, which has a 6% yield.
By way of comparison with local shares, AngloGold’s free cash flow of $1.9bn for the first six months of this year matches the market capitalisation of JSE-listed diversified miner African Rainbow Minerals. Its $1bn in dividends — reset last year to be 50% of free cash flow — is bigger than Pick n Pay’s market value. Of the 16 analysts who cover AngloGold, a dozen have a “buy” recommendation. Only one analyst recommends selling the share. The consensus target price is $104.46 a share, below its current level.
This recent performance is not, however, par for AngloGold’s course. Six years ago the miner was contending with major board dysfunction. Its chair, Sipho Pityana, quit suddenly following a complaint of sexual harassment, which he denied. A few months earlier AngloGold’s CEO Kelvin Dushnisky, formerly of Barrick, had resigned citing personal reasons related to Covid lockdowns. But a report by Bloomberg News claimed he had been forced out amid pressure from shareholder the Public Investment Corporation, which was concerned about a supposed double bonus paid to Dushnisky — an allegation he denied.
With these key personnel conniptions rife, it was no great stretch to see why AngloGold’s operations were performing poorly. Calderon, a former BHP executive, ordered an asset review. Costs were out of control. And while he didn’t eventually meet his initial cash cost reduction targets, owing to industry-wide runaway inflation topping out at 9% at one point, costs were held flat in real terms. Recovery was in the air.
He sold AngloGold’s least attractive mines — Brazil’s Mineração Serra Grande and Córrego do Sítio — as well as the projects La Colosa in Colombia and Doropo in Ivory Coast, the latter a noncore asset which was part of UK-listed miner Centamin AngloGold, acquired mainly for its Sukari mine in Egypt.
That deal, completed in November 2024 for $2.5bn, was a breathtaking coup. Weeks after, in early 2025, gold raced up $600/oz, pushing through $3,000/oz before peaking at $5,595/oz a year later, in January, 2026.
For sure, Calderon has been bold. He controversially moved AngloGold’s primary listing to New York from Joburg and domiciled the business in London in search of an improved credit rating. But he was also incredibly lucky. As a result, he may also be AngloGold’s best CEO ever.
September will mark five years at the company for Calderon. Given that this is about the average tenure of mining executives globally, you could forgive him cashing in his chips now.
Yet seemingly there is still major work to do. One of the assets Calderon promised to improve was Obuasi, a large resource in Ghana. A fatality at the mine this year resulted in a partial closure and contributed $38/oz towards a $216/oz or 21% cash cost increase for the half-year. The balance consisted of higher royalties, a 45% oil price increase and other inflation. Sunrise Dam, in Australia, also remains troublesome.
But it’s inflation, analysts think, that will become a huge challenge for miners, including AngloGold.
Standard Bank Group equities analyst Adrian Hammond has AngloGold as his top gold share pick, but he remains cautious about the sector. On the one hand he expects an astonishing gold price of $7,000 by 2028, which sounds like he’s expecting a bonfire for the dollar, or war, or both. But he also fears ever-rising cost growth. “We think prices could follow a ‘hockey stick’ trajectory, and while inflation begins to bite into earnings, we continue to remain underweight this sector, preferring platinum over gold,” he says.
Miners counter rising cost levels with promises of higher gold production, which AngloGold has. It is at present rolling out the 500,000oz/year Arthur project in Nevada’s Beatty district, a $3.6bn venture. Though it is slated to be a low-cost mine ($954/oz in all-in sustaining costs) it nonetheless represents “asymmetric risk”, according to Hammond.
The Arthur project’s outlay will be for gold past its price peak, resulting in a downward-trending revenue line, he says. “We think the industry is at a major inflection point where costs are ratcheting up with gold prices. What separates AngloGold from peers is its plans to grow 10%-15% organically, starting in 2027, translating to 300,000oz/year-450,000oz/year from a base of 3-million ounces within three years.”
With Calderon, he professes having a high level of comfort. “We expect to keep making the most of this high gold price environment,” he says. The company has said it’s keen to have a $1bn net cash buffer. Given that it’s already in place as of the half-year, expectations of further special dividends are on the cards. AngloGold says it will have to find a way.
BMO Capital Markets analyst Raj Ray says: “Free cash flow remains strong, with $1.9bn delivered in the first half, which bodes well for continued strong capital returns. With its approved buyback, we would expect to see share repurchases during the second half of 2026 to augment its capital returns.”
Shareholders will be only too happy. Says Calderon: “We’re looking forward to a strong second half on all fronts — obviously with a little grace from God, which you always need.”
