We are upgrading our recommendation on Barrick Gold to Neutral.
Lower metal pricing hurt its top and bottom lines in the first
quarter. Adjusted earnings beat the Zacks Consensus Estimate while
sales missed. The company backed its gold production and cost
guidance for 2014. Weak gold pricing and challenging economic
conditions are concerns for Barrick, along with the limited supply
of gold as new deposits. Moreover, uncertainties surrounding the
Pascua-Lama project continue to weigh on Barrick's share price.
However, the company has a strong cash flow profile, enabling it to
invest in attractive expansion opportunities. We are also
encouraged by its cost management initiatives.
Barrick Gold Corporation (ABX) is the largest gold mining
company in the world, with headquarters in Toronto, Ontario,
Canada. The company has many advanced exploration and development
projects located across five continents.
Barrick had 104.1 million ounces (oz) of proven and probable
gold reserves and 14 billion pounds of copper reserves at the end
of 2013. Barrick is placed amongst the top gold producers with
peers, such as Newmont Mining (based in U.S.) and AngloGold Ashanti
(based in South Africa). In 2013, 56% of Barrick's gold production
came from North America, 12% from North America - Other, 25% from
Australia Pacific and 7% from Africa. Barrick produced 7.17 million
ounces of gold and 539 million pounds of copper in 2013.
The company's strategy to create value for its shareholders is
focused on five key areas:
Maximizing the benefits of rising metal prices by meeting
operational and financial targets.
Increasing gold and copper reserves and production through
exploration and selective acquisitions.
Maximizing the value of its existing mines and properties by
leveraging its expertise and regional infrastructure.
Growing production by investing in and developing high return
Continuing to improve corporate social responsibility practices
to maintain and strengthen its incense to operate.
By executing on this strategy, the company expects to increase
earnings and cash flow on a per share basis and enhance its
shareholders' leverage to metal prices.
Barrick Gold Corporation (ABX): Read the Full
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
BARRICK GOLD CP (ABX): Free Stock Analysis
To read this article on Zacks.com click here.