AngloGold Ashanti continues to shine (JSE: ANG)

Gold production is up at exactly the right time

Mining is all about controlling the controllables. The price of the commodity is the least controllable thing of all, with mining houses having to make tricky capital allocation decisions with no certainty at all of where prices might go. This is why investors tend to measure performance of mining management teams based on metrics like production statistics, as that’s one of the few things that can actually be controlled in the mining sector.

AngloGold gets a bright green tick in the box for that one, with results for the three months to June 2025 reflecting a lovely 21% year-on-year increase in gold production. When combined with average gold prices up 41% year-on-year vs. just a 7% increase in all-in sustaining costs per ounce, this has led to free cash flow increasing by a rather ridiculous 149%. When things go well in mining, they go really well – the old saying “it’s a gold mine” carries a lot of relevance these days.

With cash practically bursting out the ground for them at the moment, net debt has dropped by 92% to $92 million.

Aside from maximising production at a favourable time in the market, AngloGold is focused on increasing its exposure to US assets and closing the valuation gap to its US peers. This is why they moved the primary listing to the New York Stock Exchange in 2023, instead of having the primary listing on the JSE. To further attract global investors, recent deal activity has been focused on acquiring assets in the US and strengthening the position in the Beatty District in Nevada.

The company has reaffirmed guidance for FY25, which means they are happy with where they are at the halfway mark. The market is also smiling, with the share price up 96% year-to-date!

Deneb offloads a property – and I’m glad to see it (JSE: DNB)

The broader HCI stable has better uses for capital than owning property

Property as an asset class certainly has a place, but that place isn’t on the balance sheets of corporates that have operating assets as well. REITs are structured to be the optimal owners of property and the market rewards them accordingly, as do the banks with funding terms. Corporates who have other pressures like working capital and capex can generally achieve a much better return on capital than owning property. And if they can’t, then there are bigger worries at hand!

Deneb is part of the HCI group and when they last released their numbers, I commented on how the property portfolio doesn’t seem like a sensible part of the story. There’s now a step being taken in the right direction, with Deneb announcing the disposal of a property in Durban for R48.5 million to an unrelated party.

Although this is below the value of the property in the company accounts as at March 2025 (R50.2 million), the property itself generated a loss of R1.1 million for that year. Getting rid of it is clearly a good outcome for Deneb, with the proceeds being used to settle outstanding debt.

eMedia releases the Venfin (Remgro) deal circular (JSE: EMH | JSE: REM)

This is small in Remgro’s life, but it’s a biggie for eMedia

eMedia Holdings and Venfin (which is part of the Remgro group) hold 67.69% and 32.31% in eMedia Investments (EMI) respectively. In turn, EMI holds a number of the group’s core media assets, along with a few other things.

To simplify matters, eMedia Holdings and Venfin are executing a transaction that will see eMedia Holdings come out with 100% in EMI, while Venfin flicks to the top of the structure (it works out that they will have 32.31% in eMedia Holdings N shares after the share exchange leg of the deal, so the percentages are consistent).

But before that happens, Venfin will subscribe for R59.5 million worth of N shares in eMedia Holdings, which represents a 3.97% stake in eMedia Holdings. The price for the subscription is a 20% premium to the 30-day VWAP of the N shares, although they are thinly traded and so the listed price probably isn’t a great indication of value.

The important additional part of this deal is that Venfin will need to unbundle all these N shares within 20 business days after the effective date. If they don’t, then eMedia Holdings has the right to repurchase the shares held by Venfin, so there’s no outcome that sees Venfin sitting on a large stake. This is because eMedia wants to improve liquidity in the N shares, so Venfin will unbundle them to Remgro and then Remgro will unbundle them to its own shareholders.

This is in theory a value unlock trade for Remgro as well (which trades at a deep discount to its underlying assets), but is much too small to make a dent there.

MTN Ghana adds to the African telecoms party (JSE: MTN)

This strong update comes after MTN Nigeria released great numbers

MTN is up 68% year-to-date (astonishing, really, when you consider how bad it all looked last year) and is enjoying ongoing positive momentum. The share price is up 11% in the last month alone! I can foresee criticism being levelled at the MTN Zakhele Futhi directors for winding up that scheme too quickly, but hindsight is always perfect in the market.

The latest rally is being driven by strong performances in the key African subsidiaries. MTN Nigeria released very encouraging numbers and now MTN Ghana has done the same.

For the second quarter of the year, MTN Ghana achieved total revenue growth of 40.3% and EBITDA growth of 46%, with EBITDA margin up 230 basis points to 58.6%. Profit after tax is up 57.7%. And get this – capex is actually down 0.4%, so that’s encouraging for cash flow.

Having said that, capex is still running ahead of cash generated from operations, so this business is far from a cash cow for the group. That’s ok for now at least, as its role is to be a growth asset for MTN and for investors. We’ve seen what happens to the MTN share price when belief in that growth fades.

Another twist in the Novus – Mustek mandatory offer (JSE: NVS | JSE: MST)

And it once again involves the Takeover Regulation Panel

Although takeover law is a complicated thing, a mandatory offer is one of the simplest types of transactions that is regulated by that law. The theory is that a shareholder crosses the 35% ownership threshold and is then required to make an offer to all other shareholders. There are lots of specifics around pricing and related parties, but that’s the basics of it. It’s hardly a hostile takeover, for example.

Despite how simple it’s supposed to be, the mandatory offer by Novus to shareholders of Mustek has been anything but straightforward with the regulator. After much up and down, including Novus winning a High Court appeal against the TRP regarding this deal, it looked like things had finally settled down. Alas, there’s a further twist in this story that will delay the transaction.

The companies announced on Friday that the TRP has received complaints related to the conduct by the two companies in the mandatory offer. There’s no further detail at this stage on what the complaints are. The problem is that a certificate of compliance can’t be issued during an ongoing investigation. The further problem is that the deal can’t be implemented without such a certificate.

The deal has once again reached an impasse, with the parties engaging with the TRP to get it across the line. We will have to wait and see if anything meaningful is revealed by this investigation.

Nibbles:

• Director dealings:
  • There’s been some buying of Primary Health Properties (JSE: PHP) shares by directors. The CFO bought shares worth over R1.6 million. Other related parties to the company, including non-executive directors, bought shares worth over R2.1 million in total.
  • There’s an awkward situation at Argent Industrial (JSE: ART) where existing directors (including the CEO) are invested alongside an ex-director in an entity that holds Argent shares. The ex-director wants to reduce her stake, but this comes through each time as a sale of shares by an associate of current directors. The latest such example is for R1.34 million in shares.
  • Aside from various trades linked to the settlement of share awards in Hosken Consolidated Investments (JSE: HCI), there was also an on-market acquisition of shares by a director to the value of R419k. I always ignore the share awards as they are just part of remunerations, but on-market trades are worth taking note of.

• Orion Minerals (JSE: ORN) is extending the deadline for the share purchase plan being offered to shareholders. The original closing date was 5th August and they are pushing it out to 12th August. The company was on Unlock the Stock last week and you can watch the recording of the session here.

• Accelerate Property Fund (JSE: APF) is in the naughty corner for being late with the release of its annual report. They’ve missed the deadline of getting it out within 4 months of the end of the period. They’ve admittedly been busy with a LOT of other stuff, but they need to sort this out ASAP.

• Copper 360 (JSE: CPR) has restructured its board, with the COO and external relations executive both resigning from the board. They are staying with the company, so this is really just a change to the executive roles on the board itself.

• Nigerian energy group Oando (JSE: OAO) has very little liquidity in its stock, so the results just get a passing mention here. For the six months to June, revenue was down 15% despite a strong uptick in production volumes. Gross profit fell 28%. Despite this, net earnings were flat year-on-year thanks to a favourable tax rate, among other reasons.