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Barrick Gold Up 2% Although Credit Suisse Eases EPS Estimates

Credit Suisse has kept an Outperform rating and US$58 target price on Barrick Gold Corp. (ABX.TO).

Analyst day: "On September 7th, 2011, Barrick held an Analyst Day in Toronto and provided an update on the company's current operations, green field projects and capital allocation plans. We plan on further reviewing our model after incorporating the detailed information provided."

Strong internal cashflows will be strategically employed: "ABX highlighted its plans to utilize its strong cashflows to de-lever its balance sheet going forward. After the EQN deal, indications were that dividend increases were being placed on hold indefinitely. However, the company is now indicating that the strong gold price environment has enabled the company to reaffirm its commitment to a progressive dividend policy. ABX further indicated that it is considering potential share buy backs if the company's valuation remains at depressed levels. Lastly, ABX highlighted its openness to further acquisitions highlighting its commitment to gold assets."

Red Hill and Goldrush gain our attention: "Today ABX announced the discovery of Red Hill and Goldrush deposits, which are two new gold deposits at the company's 100% owned Cortez property in Nevada. Both green field projects are highly prospective with strong grades and are amenable to open pit mining techniques. Red Hill currently has 3.5Mozs at 3.5g/t of inferred resource over a relatively short section of its 1100ft mineralized extension. Goldrush, located 1 mile to the Southeast along trend of Red Hill, has exhibited strong mineralized continuity at even higher average grades of ~5.6g/t. With an exploration budget of $26M for 2011FY and 104,000 meters of drilling remaining this year, ABX plans on determining if these two green field properties are in fact one continuous mineralization. Both discoveries are open laterally in all directions."

Cerro Casale exhibits further exploration upside: "Recent drilling efforts at Cerro Casale have located 8 new gold porphyry targets. The highest potential target called 'Luciando', is located 8km west of the proposed Cerro Casale pit, and is a near surface deposit averaging 1.5g/t gold and 0.2% copper over a 700m strike. A follow up drill program has been initiated."

EPS Revisions: "We are revising our 2011/2012/2013 EPS estimates to $4.72/$5.62/$6.66 from $4.84/$5.69/$6.62 respectively."

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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