3. Barrick Gold Corporation (NYSE:GOLD)
Current Price: $18.38
Upside Potential: 22%
Barrick Gold Corporation (NYSE:GOLD) engages in the exploration, mine development, production, and sale of gold and copper properties. This leading international gold mining enterprise, headquartered in Toronto, Canada, holds a substantial footprint in the global mining sector. Barrick Gold Corporation (NYSE:GOLD) is the top 11th mining company in the world by revenue, operating in over 13 countries. In Q1 2024, Barrick Gold Corporation saw a significant 143% increase in year-over-year net earnings per share, with adjusted EPS rising to $0.19 from $0.14 in Q1 2023, surpassing analysts’ expectations. The company’s EBITDA margin improved by 5%, reaching 41%, and operating cash flow was strong at $760 million. This performance was driven by higher gold prices and the successful ramp-up of the Goldrush mine. The Goldrush mine at Cortez, where Barrick holds a 61.5% stake, began production with an initial output of 130,000 ounces expected in 2024, projected to reach 400,000 ounces by 2028. Following the positive Q1 earnings announcement, Barrick’s stock rose 14% in the past month. Barrick’s growth continued with Q2 2024 production reaching 948,000 ounces of gold, up from 940,000 ounces in Q1, driven by increased production at Turquoise Ridge, Porgera, Tongon, North Mara, and Kibali. The average market price of gold in Q2 was $2,338 per ounce. With rising production, increasing gold prices, and decreasing costs, Barrick’s growth outlook remains strong for the upcoming quarters.
Old West Management made the following comment about Barrick Gold Corporation (NYSE:GOLD) in its Q4 2022 investor letter:
“Barrick Gold Corporation (NYSE:GOLD) is the second largest gold miner in the world, with operations in the U.S., Canada, Africa, South America and more. Barrick is also a major copper producer. Former Goldman Sachs executive John Thornton took control of the company in 2012 and quickly realized he wanted someone with a mining background to run the company. Mark Bristow, at that time CEO of Randgold, was considered one of the best gold mining executives in the world. Thornton wanted Bristow so badly Barrick bought Randgold in 2018. Bristow, who is South African, had extensive experience operating mines throughout Africa, and in fact would fly his own single engine plane to visit mines. He has his PhD in Geology, and he has flourished running Barrick the past five years.
Barrick is estimated to have $1.6 billion of net income this year on $11.5 billion of revenue. Net Income has been growing 15% per year. The stock trades at $19.00 per share which is 16 times forward earnings, and the stock has a 3.15% dividend yield. Barrick has a fortress balance sheet with $5.7 billion in cash and $5 billion of long term debt, which is only one time EBITDA.”
