Barrick Gold’s investment case is bolstered by its impressive financial performance with a 50% increase in earnings on higher output in the latest quarter.
The company’s strategic focus on organic growth, particularly the development of promising exploration projects across multiple countries, positions it for sustainable long-term expansion. There is also a solid dividend and an ongoing share buyback program.
Combine these strong fundamentals with a bullish gold price and the stock offers plenty of value for investors. It’s a top pick, especially if you’re optimistic about the yellow metal.
BARRICK GOLD CORP. (symbol ABX on Toronto; www.barrick.com) is the second-largest gold miner in the world after Newmont (symbol NEM on New York, and a recommendation of our Wall Street Stock Forecaster newsletter).
Barrick has suspended operations at its Loulo-Gounkoto mine in Mali. The company owns 80%, while a state-owned firm holds the other 20%.
The dispute with Mali’s military junta dates back to 2023 and includes demands that Barrick pay $500 million U.S. in back taxes. Mali also wants to increase its stake to 35%. Barrick now aims to settle the dispute through arbitration. But a long shutdown seems unlikely as the mine is a major contributor to Mali’s economy. Barrick has initiated arbitration proceedings through the International Centre for Settlement of Investment Disputes (ICSID) to address these matters.
Meanwhile, Barrick plans to focus on building new mines instead of on making acquisitions. This includes aiming to bring into production the company’s promising exploration projects in Egypt, Nevada, Guyana and elsewhere. Barrick also stands to benefit from the startup of other projects in the U.S., the Dominican Republic, Pakistan, Zambia, Saudi Arabia and Argentina over the next few years.
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For instance, Barrick’s Reko Diq mine in Pakistan is expected to produce $74 billion in free cash flow over the next 37 years. Barrick holds a 50% stake in the mine, while the governments of Pakistan and Balochistan own the remaining stake.
Barrick considers Reko Diq one of the largest under-developed copper-gold areas globally.
The project, which has been delayed due to a dispute resolved in 2022, is expected to start production by the end of 2028. The first phase will produce 200,000 tonnes of copper annually, with an estimated cost of $5.5 billion U.S. The second phase is set to be completed by 2029, and will double production at an estimated capital cost of $3.5 billion U.S.
Additionally, Saudi Arabian mining company Manara Minerals may invest in the Reko Diq mine in the next two quarters.
Barrick Gold: Revenue and earnings helped by higher production
In the quarter ending December 31, 2024, Barrick’s gold production increased 14.5%, to 1.08 million ounces, from 943,000. That rise, plus higher realized gold prices, helped push revenue up 8.2%, to $3.65 billion from $3.37 billion. Earnings, excluding one-time items, climbed 50.1%, to $794 million, or $0.46 a share, from $529 million, or $0.30.
Barrick’s shares yield 2.3%.
Recommendation in Power Growth Investor: Barrick Gold Corp. is a buy.
