Image source: AngloGold Ashanti Ltd.

What: AngloGold Ashanti Ltd.'s (NYSE:AU) stock price increased an impressive 50% last month. It's still down roughly 75% over the past five years. But the swift jump in February helps point something out that investors need to know.

So what: Like all precious-metals companies, AngloGold's shares benefited from gold's recent rally. Gold demand has largely been driven by investors seeking out safe-haven assets because of political uncertainty and economic weakness around the world. That's the somewhat obvious news here.

But compare AngloGold's 50% increase with a miner such as Newmont Mining Corp. (NYSE:NEM), whose shares rose "only" 25%. That's a big difference. Why might AngloGold's shares move twice as much as Newmont's? It's not a simple answer, but a look at each company's mines helps explain things.

Newmont has mines around the world, but its core operations are located in Nevada and have relatively low costs. These assets also happen to be located in one of the most politically stable regions. So despite the commodity downturn, its core business has managed to hold up relatively well with little risk of disruption.

AngloGold also has a global footprint, but its core operations are in Africa and, because of the age of the mines, its costs tend to be high. In other words, higher gold prices could very well be the difference between AngloGold's making money and losing money. It's just not the same dynamic at Newmont. So as gold prices rallied in February, AngloGold benefited disproportionately. Now layer in the fact that many of AngloGold's core mines are in very unstable countries, and you can see that there's a very different profile here.

Now what: These dynamics don't make AngloGold good or bad. They just change the risks inherent to the investment. Conservative investors would probably be better off with a miner like Barrick. More aggressive investors, however, might find that AngloGold's mine profile adds upside leverage to the shares in a rising gold price environment. But that leverage could work to the downside, too, if gold prices fall and its expensive African mines turn into a big negative or if political instability suddenly shuts down production at key assets.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.