Barrick Gold Corporation GOLD stated that it sees 30% growth in the production of gold-equivalent ounces from its existing assets by the end of this decade, while continuing to unlock the value embedded in its portfolio. At the Gold Forum Americas, GOLD highlighted that it remains alert to potentially value-accretive opportunities arising from industry consolidation. However, the company enjoys the advantage of doing so from an asset base that will support organic growth well into the future.
Five years ago, Barrick set out to build a sustainably profitable gold and copper business focused on world-class assets. The company did not have to acquire these assets at a premium; they were already embedded in the merged portfolio of Barrick and Randgold, requiring only the unlocking of their value. Barrick boasts six Tier One gold mines, with more in development. Its long-term plans are centered on high-quality orebodies with industry-leading grades, which are driving improved cost profiles. In addition to its robust gold portfolio, GOLD is expanding its copper business to meet the rising demand for the strategic metal, enhancing its growth options with copper-gold porphyries.
Barrick highlighted three world-class gold opportunities, all located in Nevada, which it considers the premier mining jurisdiction globally. The recently-commissioned Goldrush mine is ramping up to a targeted 400,000 ounces of production per annum by 2028. Bordering Goldrush is the 100% Barrick-owned Fourmile, which is yielding grades double those of Goldrush and is anticipated to become another Tier One mine. In Nevada, the 14-million-ounce Leeville project is expected to be a significant growth driver, with the potential to double or triple Carlin’s reserves and extend its life beyond 2045.
On the copper side, two major projects are progressing toward first production in 2028. The Reko Diq copper-gold project in Pakistan is designed to produce 400,000 tons of copper and 500,000 ounces of gold annually in its second development phase. In Zambia, the Lumwana Super Pit project is set to double the mine’s production over a mine life of more than 30 years.
Barrick Gold Corporation Price and Consensus
Barrick Gold Corporation price-consensus-chart | Barrick Gold Corporation Quote
Mining requires constant replacement of the ounces it depletes. GOLD is a leader in orebody expansion and has more than replaced the gold reserves it has mined in the past five years. The newly added ounces are of the same or better grade than reserves that were mined.
Since 2019, Barrick has built an industry-leading balance sheet, reducing net debt by $3.5 billion, investing $11.2 billion in life-of-mine plans for key mines and returning more than $5 billion to shareholders. The company’s strong operating cash flows provide the financial flexibility to fund its growth projects.
Despite these achievements, Barrick believes its shares remain undervalued. According to analysts’ consensus net asset value calculations, the value of Barrick’s interest in Nevada Gold Mines and its copper portfolio almost exceeds the company’s current market capitalization. This implies that the rest of Barrick’s business, including its interest in three Tier One gold mines outside Nevada, the world-class Fourmile project and its development pipeline, is valued at only $3.3 billion. Furthermore, this valuation does not account for the company’s exploration teams’ unparalleled success in discovering new ounces. Based on the current share price, GOLD believes the case for investing in its stock is compelling.
Barrick’s shares have gained 25.4% in the past year compared with a 38.7% rise in the industry.
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Zacks Rank & Key Picks
Barrick currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are IAMGOLD Corporation IAG, Eldorado Gold Corporation EGO and Hawkins, Inc. HWKN. While IAMGOLD and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), Hawkins carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IAMGOLD’scurrent-year earnings is pegged at 41 cents per share, indicating a rise of 355.6% from the year-ago level. IAG’s earnings beat the consensus estimate in each of the trailing four quarters, with the average surprise being 200%. The stock has surged nearly 118.6% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average earnings surprise being 430.3%. The company's shares have surged nearly 73.8% in the past year.
The Zacks Consensus Estimate for Hawkins’ current fiscal-year earnings is pegged at $4.14 per share, indicating a rise of 15.3% from the year-ago level. The Zacks Consensus Estimate for HWKN’s current fiscal-year earnings has increased 12.8% in the past 60 days.The stock has appreciated around 100.4% in the past year.
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