Barrick (GOLD) to Make Additional Investment in Midas Gold

Barrick Gold Corporation GOLD stated that it will purchase 7,274,142 common shares of Midas Gold Corp. as part of the latter’s public offering of common shares.

Barrick currently owns 46,551,731 common shares of Midas Gold, which represents roughly 19.6% of Midas Gold’s outstanding common shares (non-diluted basis). Post the closing of this offering, which is expected on or about Jun 19, 2019, Barrick will own roughly 19.9% interest in Midas Gold.

The company will buy the additional common shares at the price of C$0.60 per share for total consideration of around C$4.4 million (or roughly $3.3 million).

Notably, Barrick is purchasing the common shares of Midas Gold for investment purposes. Subject to market conditions and other factors, the company may acquire additional ordinary shares or other securities of Midas Gold or dispose of some or all of the common shares or other securities of Midas Gold that it owns.

Barrick’s shares have gained 3.8% in the past year compared with the industry’s 11.6% rise.


The company delivered adjusted earnings per share of 11 cents in the first quarter of 2019, which beat the Zacks Consensus Estimate of 10 cents.

During first-quarter 2019 earnings call, Barrick stated that its key growth projects were on track. Also, brownfields and greenfields exploration were boosting reserves and enabling the company to identify new opportunities.

For 2019, the company anticipates gold production in the range of 5.1-5.6 million ounces at an all-in sustaining cost (AISC) of $870-$920 per ounce and cost of sales of $910-$970 per ounce.

The company expects copper production in the range of 375-430 million pounds at AISC of $2.40-$2.90 per pound and at cost of sales of $2.30-$2.70 per pound.

Zacks Rank & Key Picks

Barrick currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Materion Corporation MTRN, Flexible Solutions International Inc FSI and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 27.3% for 2019. The company’s shares have gained 16.7% in the past year.

Flexible Solutions has a projected earnings growth rate of 342.9% for the current year. The company’s shares have surged 126.7% in a year’s time.

AngloGold has an estimated earnings growth rate of 90.6% for the current year. Its shares have rallied 67.2% in the past year.

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