In late 2025, gold was trading at more than $4 500/oz, having gained at least 60% over the preceding 12 months (and doubling from early 2024 levels). This made the metal the world’s best-performing asset class for the year. According to Andries Rossouw, PwC’s leader for Africa energy, utility and resources, gold production revenue increased 22% to R132 billion for the year to June 2025.

Market watchers are asking how long gold’s bull run can last. The consensus is that it has long legs and is far from over. Rossouw believes it is unlikely to taper off soon. ‘China, with its huge foreign reserves, is replacing US treasury bills with gold. Other central banks are following a similar stance. This is an invested demand trying to address global risk, which is sitting at high levels,’ he says.

Gold miners have what analysts call ‘operating leverage’, which is an effect produced by their usually high fixed costs (labour, equipment and energy). This means that earnings increase at a faster rate than revenues when the gold price rises.

Investec economic consultant Brian Kantor points out that ‘you get more bang for your buck by investing in gold mines rather than in gold bars’.

Gold miners’ margins have widened over the past 18 months. Thanks to their operating leverage, even the laggards in the JSE gold segment have more than doubled their market capitalisation over the past 12 months. The best performers – AngloGold Ashanti, Gold Fields and DRDGold – have done almost twice as well, with market capitalisation growth approaching 200% for the year.

Kantor argues that ‘changes in the gold price explain up to 50% of the move up or down in the value of the shares’. He points out that among the factors that account for the other 50% are operational efficiencies, the expected life of reserves, risks incurred in increasing production, overpaying for acquisitions and a number of investment climate issues. The latter include what Kantor calls ‘onerous taxes and regulations or even expropriation without adequate compensation – a key risk as they become more profitable’. This last issue has been a recent problem in other African jurisdictions (Niger and Mali), and SA has been, in the eyes of some global investors, tarred with the same brush.

Partly as a result, African assets, including those listed in the JSE’s gold segment, have tended to trade at a discount compared to their industry peers and the overall market. The Nasdaq reported in May 2025 that AngloGold Ashanti’s forward price/earnings ratio was about 16% below the industry average. The same analysts considered SA’s biggest producer, Harmony Gold, to be trading at a 60% discount in September. The discount for AngloGold Ashanti had, however, all but disappeared by the end of 2025.

The JSE’s gold segment is not the powerhouse it was 45 years ago. In 1980, 33 gold miners were listed on what was then the dominant global hub for mining equities. Today, after decades of consolidation, only six are listed in the segment. The decline is directly related to more easily extracted reserves being mined out and thus a diminished role for gold mining in the SA economy.

As Kantor notes, ‘in 1980 South African gold mines produced close to 1 000 tons a year. Current output appears to have stabilised at about 100 tons. In 1980, gold sales were equal to 15% of GDP (and 45% of all merchandise exports). Today these proportions are about 2% of GDP and 7% of goods exported’.

However, these six companies offer investors a good range of the sorts of assets on offer in gold mining. They include two large-cap companies with diversified international assets (AngloGold Ashanti and Gold Fields); one large-cap, SA-focused, deep-level miner in Harmony Gold; two different mid-cap operations in Pan African Resources with its focus on acquiring and optimising underperforming assets and DRDGold, which is focused on treating mine dumps and tailings. Randgold Exploration is a much smaller company focused on recovering assets misappropriated in the 1990s by a range of actors centred on the late Brett Kebble.

AngloGold Ashanti is the gold-focused heir to the company that once dominated the SA economy. Now with a primary listing in New York – and secondary listings in SA, Australia and Ghana – the company owns assets in 10 countries across four continents. Ironically, none of these mines is located in SA. The company sold its last SA asset – the ultra-deep Mponeng mine – to Harmony Gold in 2020.

This sale marked the beginning of a considerable makeover of the company. The new CEO, Alberto Calderon, who was appointed in 2021, initiated a comprehensive review of AngloGold Ashanti’s assets around the world with the intention of reducing costs. These, he said in 2021, were ‘unacceptable and uncompetitive’.

By 2025, AngloGold Ashanti held a diverse range of lower-cost assets around the world. These include five Tier 1 mines, a term that implies they fall into the top quartile of big assets around the world. These are Geita in Tanzania, Obuasi and Iduapriem in Ghana, Kibali in the DRC, and Tropicana in Australia. Geita, Iduapriem and Tropicana are largely open-pit operations, which are less costly than underground mines.

But while these are assets that AngloGold Ashanti has been working hard to optimise, it is the perfect timing of the company’s two recent acquisitions that has most impressed investors. Towards the end of 2024, it acquired Sukari gold mine in Egypt when it completed the takeover of London-listed Centamin. This is a large established producer, bordering on Tier 1 status, that recently completed a big capital expansion. It is an exceptional asset, which produces 500 000 oz/year (worth some $2 billion).

AngloGold Ashanti’s second recent acquisition may be even more exciting. This is the Silica-Merlin green fields project in the Beatty district of south-western Nevada in the US. With a gold deposit estimated at 16 million ounces, it is one of the few new Tier 1 assets under development. AngloGold Ashanti has been acquiring and consolidating a number of properties in the location since the beginning of 2022. The company expects to pour the first gold in 2026.

At the company’s quarterly results briefing in July 2025, Calderon was able to announce that AngloGold Ashanti had finally eliminated the discount measured against its North American peers. ‘For as long as this company has been in existence, we’ve struggled with [this] disconnect. We know this isn’t the result of a single thing but rather the cumulative effect of a number of factors. We’ve gone about systematically addressing these issues over the past three years,’ he said.

Gold Fields is the other JSE-listed gold miner with a range of international assets. It owns eight established gold mines in Australia, Peru, Ghana and SA, with two projects in Chile and Canada.

The jewel in the company’s crown is the South Deep mine in SA, the most recent (and possibly last) major development in the country. This is a heavily mechanised deep-level operation with a massive ore body, expected to last until the 22nd century. South Deep, which for years had difficulties ramping up production to meet forecasts, is now a stable producer, with about 300 000 oz expected for 2025.

Gold Fields has also managed to time the current gold price run well. In the first half of 2024, the company faced a challenging period. It was particularly affected by what CEO Mike Fraser described as ‘weather-related operational challenges’ especially related to ramping up production at the new Salares Norte mine in the Atacama region of Chile. An especially harsh and early Andean winter froze equipment and delayed progress.

These challenges appear to be resolved with production at Salares Norte increasing from 45 000 oz in the fourth quarter of 2024 to 73 000 oz in quarter two of 2025. Salares Norte, which is producing about the same volumes as South Deep, has come on stream at the perfect moment to take advantage of the company’s operating leverage. Gold Fields was able to report a 24% increase in production across all operations for the first half of 2025 as well as a half-yearly profit of more than $1 billion.

The other large-cap company in the JSE’s gold segment, Harmony Gold, looks at first glance like the primary carer of an industry in terminal decline. Its portfolio, dominated by SA assets, includes two big ultra-deep-level gold mines in Mponeng (previously Western Deep Levels No 1 Shaft) and Moab Khotsong, both bought from AngloGold Ashanti as part of its process of leaving SA. The company also owns such iconic SA names as Doornkop, Joel, Tshepong, Masimang and Target 1 (an extension of the Lorraine mine near Welkom in the Free State).

Popular wisdom would have it that these are old, deep, expensive and nearly worked-out mines. That is not the view of Harmony’s management. ‘Our major capital spending has been going into [… ] Mponeng and Moab Khotsong, [which are] high-grade underground mines. We’re extending the life of those mines by 20 years,’ says Harmony CEO Beyers Nel. Harmony’s capex was R11 billion in 2025, and the company expects to spend R13 billion in 2026. A significant amount is going into a third asset purchased from AngloGold Ashanti – a ‘surface mining’ (tailings) operation in the Free State.

Harmony Gold is the biggest gold producer still standing in SA, with 1.48 million oz in 2025. The company’s gold reserves (36.8 million oz) place it in the global top 10. But it is not solely South African in focus. The company’s other major gold mining asset is the Hidden Valley gold mine in Papua New Guinea, a relatively young asset (production started in 2010) which it acquired in 2016. The open-pit operation delivered a profit of R1.7 billion in 2025.

Harmony has also diversified into copper, acquiring assets in Australia. However, Nel told shareholders in November that ‘our strategy remains gold first with copper as a complementary metal’.

The macroeconomic and geopolitical pressures behind gold’s big current run do not look likely to abate in the near future. Indeed, in 2025 it seems that Western investors joined central banks in buying almost any sort of gold asset they could get their hands on.

Some gold enthusiasts suggest that we are only seeing the foothills of a meaningful gold bull market. SA investors are fortunate in that the JSE is still a place to get exposure to this unfolding upside.

By David Christianson
Image: iStock