AngloGold Ashanti will move its primary listing to the US in a move that the gold producer hopes will close the market valuation gap between itself and larger rivals in Northern America such as Newmont Corporation and Barrick Gold.
The relocation of its primary listing to New York from the JSE confirmed the long-held market speculation after AngloGold sold its remaining Mponeng mine to Harmony Gold in 2020, ending an era with SA that dates back more than a century when it was part of the Anglo American stable.
AngloGold will also move its headquarters to UK as part of the transition championed by CEO Alberto Calderon.
About a year ago, AngloGold embarked on a painstaking exercise to review and optimise its portfolio through various channels that included improving productivity and reducing production costs as one way of catching up with its global peers.
Calderon has previously said it would take about two to three years to narrow the discount at which AngloGold shares were trading relative to top bullion producers, which are all listed on Wall Street — the deepest and largest capital market in the world.
With a primary listing in New York, AngloGold is looking to attract larger investor base, which will enhance liquidity in its shares.
Its market value stood at R206bn ($10.7bn) on Friday compared with Barrick Gold’s $33.5bn and Newmont’s $36.5bn.
The New York listing will “in time facilitate greater performance and valuation comparison to North American peers, with closer proximity to North American institutional investors and analysts”, AngloGold said in a statement on Friday.
The proposed transaction, which will cost AngloGold about 5% of its market value to implement, is subject to approval of at least 75% of its shareholders. The 5% of its market value is equivalent to R10.3bn at current prices.
AngloGold has over time diversified its geographic base as mines in its traditional home market became mature, deeper and more costly. Its portfolio comprises mines in select African countries including Ghana and Tanzania, as well as in the Americas and Australia.
“While we agree that a move to New York will increase the investment demand, especially from index funds, the far more important consideration, in our opinion is the value of the underlying assets,” said Christiaan Bothma, investment analyst at Sanlam Private Wealth.
“The ongoing asset review programme aims to improve the cost competitiveness of its mines compared to peers and the success thereof remains the primary driver of any further rerating versus peers.”
AngloGold shares and other gold stocks have shot the lights out on the JSE this year, driven primarily by higher gold price.
Its shares ended 4% lower to R491.26 on the JSE on Friday but were up 49% so far in 2023. Gold Fields shares were up 72% over the same period.
The gold mining industry is on the verge of the biggest merger to date as Newmont, the world’s biggest gold miner, has made a non-binding offer to acquire Australian mining giant Newcrest for $19.7bn. Newcrest, Australia’s biggest gold company, had indicated it would support the offer if it was made binding.
Chair Maria Ramos said the move is a “logical progression for AngloGold Ashanti, which is well aligned with the evolution of the business in recent years and will assist in unlocking value in a way that’s minimally disruptive for our stakeholders.”
Anglo will retain a secondary listing on the JSE and Ghana.
“It is a very logical move. AngloGold has no mines in SA any more. Anglo sold its last remaining stake in AngloGold in 2011 to international investors — so why should AngloGold have the ‘tarnish’ of being South African,” independent analyst Liston Meintjes said.
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