Can AngloGold Ashanti's Investment in Geita Mine Improve Production?

AngloGold Ashanti plc AU is 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 $100 million investments 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.

Geita is one of AU’s flagship mines that has produced 4.3 million ounces of gold between 2017 and 2024. The mine had mineral reserves of 2 million ounces from 2017 to 2024. The ongoing investment aims to increase Geita’s mineral reserves by about 60%, which will extend the mine life from seven years to at least a decade by 2028.

AngloGold Ashanti is also conducting a conceptual study that evaluates whether upgrading processing capacity by 1 million tons annually will boost annual production to 600,000 ounces. This indicates an increase from current production rates of about 500,000 ounces per year. A feasibility study for the expansion is currently underway, with completion expected by 2027.

Geita will continue with its flexible ore sourcing strategy with one open pit and three distinct underground fronts. It is focused on maintaining high-value deposits that will further contribute to overall production. The company will maintain the Tailings Storage Facility capacity at the mine through incremental extensions, with a new facility expected to be built in the mid-2030s. These investment plans will unlock Geita’s potential and lift its production in the upcoming years.

Strategic Investments by AngloGold Ashanti’s Peers

Kinross Gold Corporation KGC is progressing well with its Advanced Exploration program at Great Bear in Ontario. Kinross Gold has already completed and commissioned a natural gas pipeline. The company is currently moving ahead with the Main Project's detailed engineering, procurement and exploration.

Kinross Gold’s investment here will include working on mills, TSF and infrastructure. Exploration is also ongoing, with the company targeting new mineralization.

Newmont Corporation NEM is progressing with several growth projects, like the Ahafo North expansion in Ghana and the Cadia Panel Caves and Tanami Expansion 2 in Australia. Recently, Newmont achieved commercial production at the Ahafo North project. Ahafo North is expected to produce between 275,000 and 325,000 ounces of gold annually over an estimated mine life of 13 years. Newmont expects its growth projects to expand production capacity and extend mine life.

AU’s Price Performance, Valuations & Estimates

AngloGold Ashanti stock has appreciated 239.2% year to date, outperforming the Zacks Mining – Gold industry’s 101.9% growth. During this time, the Basic Materials sector has risen 10.5%, while the S&P 500 has gained 14.3%.

AngloGold Ashanti is currently trading at a forward 12-month earnings multiple of 12.87X, slightly premium compared to the industry average of 12.78X. The stock has a Value Score of B.

The Zacks Consensus Estimate for AU’s 2025 sales is pegged at $9.29 billion, indicating 60.4% year-over-year growth. The consensus mark for the year’s earnings stands at $5.80 per share, indicating year-over-year growth of 162.4%.

The Zacks Consensus Estimate for 2026 sales implies a 0.3% year-over-year dip. The same for earnings indicates growth of 11.4%. However, EPS estimates for 2025 and 2026 have been trending north over the past 60 days, as seen in the chart below.

AU stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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