CEO vacuum hurts AngloGold
AngloGold Ashanti has had a bad year, with the company’s lack of a permanent chief executive officer and a suspension of its Ghana mine operations weighing on the stock. But with shares now cheap compared with peers, analysts see potential for upside.
Shares of the world’s third-largest gold producer have dropped 30% in the past year, making it the worst-performing stock in the 113-company Bloomberg World Mining Index.
It also trails peers on South Africa’s FTSE/JSE Precious Metals and Mining Index, which has gained 20% in the same period.
Investor sentiment began to sour three days after the company’s shares rose to a record on 27 July. That’s when AngloGold’s CEO Kelvin Dushnisky shocked stakeholders by announcing his resignation.
The stock on Tuesday fell to the lowest since March 2020, and trades at a forward price-toearnings ratio of 8.5 times compared with 10.8 for the Bloomberg mining index.
“AngloGold is a good turnaround stock at this point, being one of the cheapest large cap gold stocks globally,” said Bloomberg Intelligence mining analyst Grant Sporre.
Appointing a CEO and resuming mining operations in Ghana “would all be positive catalysts and may be enough for the stock to play catch up to peers, even if gold prices were to flatline”.
Five months after the CEO announced his decision to resign, the company’s chairperson quit and in May it had to suspend operations at its Ghana mine following an accident.
The company’s move to boost its dividend fivefold earlier this year hasn’t helped the shares.
The key trigger for investors will be the appointment of a permanent head, according to Raj Ray, director of metals & mining research at BMO Capital Markets. Interim CEO Christine Ramon has been running the company since last year.
The search for a permanent CEO is a “top priority for the board, which is fully-focused on securing the best candidate for the role,” Chris Nthite, a AngloGold spokesperson, said in an e-mail on Tuesday.
Rival Gold Fields named former Anglo American Platinum boss Chris Griffith as head.
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