Barrick Gold is a leading global gold mining company. The company is primarily active in the gold and copper business as well as exploration and mine development. The merger of Barrick Gold with Randgold Resources has created an industry-leading gold mining company.

Barrick Gold sells its products in the world market through various distribution channels such as the gold spot market and independent smelters. The company has a diversified portfolio that spans the productive gold districts of the world. Barrick operates gold and copper mining and projects in 13 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia.

More than 40% of sales come from the USA. The company is focused on high-margin, long-lived assets and operates six Tier 1 gold mines. The reportable segments are Carlin (18% of 2019 sales), Cortez (~ 13%) and Turquoise Ridge in Nevada as well as Loulo-Gounkoto (~ 10%), Pueblo Viejo (~ 14%) and Kibali (~ 45%). .

Barrick Gold owns over 61% of the ownership rights in Nevada Gold, the largest gold producing complex in the world. The mining operation includes 8 mines with advanced infrastructure and processing facilities.

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Investment data

Sales growth and market exposure

Barrick’s gold business is backed by its robust copper business. The company generates ~ 95% of its revenue from gold sales and the remainder 5% from copper. It owns a diversified portfolio of assets in many of the richest gold districts in the world. Barrick Gold is in a good position to realize the full potential of the Nevada mines through synergies and world class operational improvements. It’s also favorable to new discoveries and organic growth from its existing asset base. The company is also present in the as yet little explored and emerging frontiers.

Barrick Gold continues to add new projects and targets to its global exploration portfolio. The company has met its 2020 production targets amid the COVID-19 pandemic, and has achieved steady operating performance across all quarters. It should benefit from the start of work at the Pueblo Viejo plant, the ramp-up of Bulyanhulu on the line and the continuous improvement on the Turquoise Ridge. An uninterrupted supply chain and working with key suppliers helped reduce volatility and uncertainty.

Dividends

Barrick Gold has a dividend yield of 1.6% and a low payout ratio of 27%. The company most recently increased its dividend by 12.5% ​​and has posted a dividend growth rate of more than 35% CAGR over the past three years. The quarterly dividend of 9 cents per share has tripled since the Randgold merger was announced. Barrick proposed returning $ 750 million of capital to shareholders in 2021.

Although the demand for physical gold declined due to the pandemic, it continued to be a preferred choice for investing in the mutual fund. The average gold price in 2020 was $ 1,770 / ounce, a 27% increase from the 2019 average of $ 1,393 / ounce, making it the fifth straight year of annual average price increases.

Copper is a valuable industrial metal and made a significant contribution to Barrick’s bottom line in 2020. Favorable fundamentals for electric vehicles act as a tailwind for copper demand in the long term. Barrick has the lowest cost of cash among its competitors and has a remaining productive life of at least ten years.

Barrick Gold’s stock prices rose significantly following its merger with Randgold Resources. The company also reduced its debt burden from nearly $ 13 billion in late 2014. It has no significant debt maturity until the next ten years. Barrick posted strong free cash flow of $ 3.4 billion last year, which has increased more than ten-fold since the merger was completed two years ago. The company’s net operating cash flow also increased 91% year over year.

Barrick Gold (ABX) historical return
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competition

Barrick Gold competes with greats like Goldcorp and Agnico Eagle. Goldcorp is a global gold producer with a portfolio of long-lived, high quality assets across America. Agnico Eagle is a leading gold mining company with mines in Canada, Finland and Mexico and years of experience.

An integrated supply chain spanning multiple continents, a presence in productive gold districts, dedicated international partnerships and industry-leading logistical arrangements are the main strengths of Barrick Gold.

Bottom line

Barrick continued to reduce debt, increase cash from operations, and maintain the dividend. As one of the largest gold mining companies in the world, Barrick Gold should benefit from the rising gold prices. Significant progress has continued since merging with Randgold to create the world’s most valuable gold company.

Barrick Gold’s focus on Tier 1 mines should continue to support steady and low-cost production going forward. It is an industry leader in technology innovation and is well positioned to adapt to changing values ​​and expectations.

If you’re not keen on holding the stock, check out Canadian gold ETFs. The company is also double listed and can be found on the NYSE.

ABX against TSX against SP500
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Barrick Gold (ABX) historic PE
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