Strong Buy: AngloGold Ashanti plc (NYSE/JSE: AU)

AngloGold Ashanti plc (NYSE/JSE: AU)

Sector: General Intelligence Materials

Rating: Strong Buy

Price Target: $55

AngloGold Ashanti: A Quantum Computing, Artificial Inteligence Layer

Investment Thesis

AngloGold Ashanti represents an underappreciated way for investors to gain exposure to the critical resource needs of the emerging quantum computing industry. The company's substantial gold reserves and mining expertise position it to become an essential supplier of key materials as quantum hardware scales.

Gold:

1) Mission-Critical for Qubits and Interconnects

2) Gold has unique electrical and quantum properties making it vital for constructing the core components of quantum computers like:

3) Superconducting qubits - Gold's ability to remain superconducting at low temperatures is ideal for building ultra-cold qubits that can maintain quantum coherence.

4) Cryogenic Interconnects - Similarly, gold's low temperature superconductivity allows it to efficiently connect qubits while minimizing electrical noise.

5) With 41.7Moz of gold reserves currently, AngloGold has visibility on a reliable long-term supply to support scaling quantum computer production.

6) Potential Vertical Integration Into Copper

While not yet a significant copper producer, AngloGold does hold substantial copper resources, especially at its Quebradona project in Colombia. With copper serving as the conventional wiring for quantum computers just as in classical electronics, this existing copper exposure offers AngloGold an option for vertical integration.

7) As a diversified gold-copper producer, AngloGold could become a turnkey supplier of critical quantum computing materials by the end of this decade based on current project timelines.

8) Proven Extraction Capabilities

What further enhances AngloGold's positioning is the expertise it has built up in extracting precious and base metals over its 100+ year history. This technical know-how could allow AngloGold to expand into successfully mining other strategically important elements like yttrium and erbium once demand materializes.

These additional quantum materials could be layered onto AngloGold's existing extraction pipeline at relatively low incremental cost and complexity.

9) Valuation Upside From Multi-Use Demand

Currently, AngloGold trades at just 0.1x the value of its mineral reserves, using a $2,355/oz gold price and $4/lb copper price. This essentially prices in zero value for its actual production or potential role supplying next-generation technology industries like quantum computing.

A $30 discounted target price applies a still-discounted 0.5x P/NAV multiple on AngloGold's reserves, factoring in development and jurisdictional risks. Key catalysts could include industry partnerships around quantum materials, robust gold/copper pricing, and reserve/resource expansions.

Risks

1) Mining risks, jurisdictional uncertainty, sustained low gold/copper prices

2) AngloGold Ashanti provides investors scarce exposure to the gold-based materials expected to power the coming wave of quantum hardware. With an attractive entry point at just 0.1x reserves, we believe the long-term demand tailwinds make AngloGold an undervalued way to position for the quantum computing future.