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AngloGold Ashanti (NYSE: AU) stock is crushing the S&P 500. Shares of the gold miner zoomed 30.9% in the month of January alone, according to data provided by S&P Global Market Intelligence, and are inching even higher this month. The gold stock is now up a solid 38% in 2025, as of this writing.
AngloGold's earnings are just around the corner, and expectations are high given the miner's recent acquisition of Centamin and its prized Sukari gold mine in Egypt. However, something else is sending the gold stock to the skies now.
AngloGold is targeting higher production at a lower cost
Sukari is one of the largest gold mines in the world. With its acquisition in November 2024, AngloGold expanded its footprint into Egypt and now operates across four continents, with assets in some of the world's top gold-producing regions.
The Sukari mine is expected to boost AngloGold's annual gold production by 450,000 ounces to over 3 million ounces. More importantly, it's a low-cost mine and should bring AngloGold's total production cost down. For perspective, Sukari's all-in-sustaining cost (AISC) was only $1,196 per ounce in 2023 versus AngloGold's 2023 AISC of $1,538 per ounce. AISC is a comprehensive metric used in the gold industry that reflects all the major costs of operating mines as well as other important expenses such as sustaining capital expenditure.
While Sukari should boost AngloGold's fourth-quarter production and cash flows, gold prices are booming. That's the biggest reason why AngloGold stock has surged in recent weeks.
Gold could rise further, and so could AngloGold stock
Gold just hit an all-time high even as I write this, with prices jumping nearly 40% in the past year or so. President Donald Trump's tariffs and potential trade wars are compelling investors to flock to safe-haven assets like gold amid rising economic and geopolitical uncertainty.
The timing couldn't have been any better for AngloGold -- the price of gold is zooming at a time when the miner's production is also on the rise, thanks to the Sukari mine. While that pretty much explains the solid run-up in the gold stock in recent weeks, the momentum could continue ahead of AngloGold's fourth-quarter and full-year earnings release on Feb. 19.
I expect strong growth in AngloGold's production, top line, earnings, and cash flows in Q4. I'd also urge investors to keep an eye on management's outlook for 2025 and its next growth steps. With Sukari expected to bring down AngloGold's costs, the miner could divest some of its higher-cost Tier 2 assets to improve its cost profile. That should further boost AngloGold's cash flows, especially if gold continues to rally.