For a brief but delicious moment, AngloGold Ashanti was worth more than Anglo American, its former parent company. On November 27, AngloGold hit a record high of R748bn while Anglo was at R690bn. It was a brief flickering of the improbable made true, in a year of striking price records for gold.
Even now, the two companies are level-pegging in terms of valuation. What curious series of events has led us here, some might wonder.
As it turns out, the similarity in valuation is not so curious after all; at least not for Anglo shareholders. To be fair to the UK miner’s track record for shareholder value, you’d probably have to add back Valterra Platinum, which Anglo demerged on May 31 in a transaction that gave Anglo shareholders 110 of the platinum miner’s shares for every 1,075 Anglo shares held. In fact, you might even add back Thungela Resources, now worth R11.8bn. The thermal coal miner was demerged from Anglo American in June 2021, but has been four times its current value.
There are fair questions to be asked, however, about whether Anglo American’s portfolio simplification to focus on copper and iron ore will add value in the long term, especially considering the delicacy of its proposed merger with Canadian company Teck Resources. Shares in Anglo are 37% higher this year, easily outpacing those of former suitor BHP, up 5.3%. But a lot of that value could evaporate if the merger fails.
In addition to the votes of shareholders in both companies, scheduled for December 9, the merger is subject to a national security review under the Investment Canada Act. Canadian industry minister Mélanie Joly was quoted by The Wall Street Journal as saying Anglo’s Teck deal “did not do enough” to satisfy her government. “I think that Canadians should get more out of this merger of equals, and the process is continuing,” she said.
The other side of the equation is the extraordinary improvement in gold equities
Do streamlined companies have better ratings than companies with greater diversification? It would seem so, for now. Anglo rival Glencore has underperformed its peer group this year. In the past two months Goldman Sachs and UBS have called for its restructuring. It is due to provide a strategic update this month.
The other side of the equation is the extraordinary improvement in gold equities. At first, gold shares lagged the metal’s price, but this year they have caught up. The Van Eck Gold Miners ETF is 135% higher in 2025, while the gold price has risen 61% over the same period.
“While no bull run lasts forever, the foundations of gold’s ascent — particularly the structural shift in private and official sector demand — suggest that price risks remain skewed to the upside over the next 12 months in the face of ongoing global uncertainty,” says Joni Teves, a strategist for UBS.
For AngloGold Ashanti specifically, there may be more good news to come owing to a strong performance in production and cash cost containment. The group’s projects in Nevada are getting good press and have “the potential to trigger a rerating if capital intensity is reasonable and spending is phased”, says Steve Friedman, the Swiss bank’s gold and platinum analyst in Joburg.
“Positive operational momentum and emphasis on cash returns could continue to support the relative outperformance,” he says.
Shares in AngloGold are 62% higher this year.
Pan African moves up in the world
Pan African Resources, once considered an also-ran in South Africa’s gold sector, has been admitted to the FTSE 250 index following its recent shift to London’s main board.
“We had expected to see Pan African join [that index], and we think its entry will increase the company’s awareness in the UK market and beyond,” says Richard Hatch at Berenberg Bank in London. “The company continues to offer attractive growth and shareholder return potential, and we see plenty of upside from current levels.”
Days after the company was included in the London Stock Exchange’s list of likely index additions and deletions in late November, Pan African, headed by Cobus Loots, also announced it is planning to fast-track the R2.8bn expansion of its Joburg gold-from-tailings project at Mintails Tailings Retreatment (MTR).
The project aims to increase output from the region by 30,000oz-35,000oz a year to 100,000oz. This will be either from a new plant or from expanding the existing plant, which is the more likely and lower-risk option Pan African is considering. Either way, the increased processing capacity will treat gold-bearing ore at the Soweto dump, which neighbours the current Mogale dumps.
Apart from producing more gold at elevated gold prices, the project, which is due for an investment decision in June, helps derisk the overall business, which previously relied more on underground gold from Barberton and Evander, both in Mpumalanga. About 58% of Pan African’s 2026 gold production is already from the surface.
In the wake of the potential expansion at MTR, Berenberg placed a target value of £1.12 a share on Pan African, which compares with its current value of £1.05 a share, a year-to-date improvement of nearly 200%.
“Certainly the production growth potential from an expansion at MTR, plus the shift to fresh ore mining at Tennant Creek [Pan African’s newly acquired Australian mine], as well as the rising rates of ore mining expected at Evander now that the new subvertical shaft is running, warrant an elevated near-term multiple. [This] likely has further to go as management provides more details over the precise timings and spend levels to achieve this volume potential,” say analysts at UK brokerage Peel Hunt, Pan African’s nominated adviser.
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