Barrick Gold has announced a $1 billion share buy-back amid challenges related to its Loulo-Gounkoto mine in Mali. CEO Mark Bristow highlighted the company’s strong fundamentals, despite a 69% increase in net earnings for the year. The stock is up 12% year-to-date, but production guidance for 2025 is lower. Negotiations with the Mali government are currently stalled.
Barrick Gold has launched a $1 billion share buy-back program, asserting that its stock has been unfairly impacted by challenges in Mali, where operations at the Loulo-Gounkoto mine are currently halted due to a dispute with the military government. CEO Mark Bristow stated, “While ongoing issues in Mali remain an investor concern, which have overly weighed on the share price, Barrick’s fundamental value proposition has never been stronger.”
For the fiscal year ended December, Barrick reported a substantial 69% increase in net earnings, amounting to $2.14 billion, translating to $1.26 per share. In early trading in New York, the company’s stock rose nearly 5%. Year-to-date, Barrick’s shares have increased by 12%, which is lower than the gains seen by competitors Newmont and AngloGold Ashanti, which reported increases of 19% and 35%, respectively.
The company repurchased $498 million of its shares under the 2024 program, significantly exceeding analysts’ expectations of $55 million, particularly with $354 million of that occurring in the final quarter of the year. Nevertheless, Scotia Bank analysts assessed Barrick’s results as slightly negative due to weaker gold and copper production forecasts for 2025, despite improved cost guidance.
Looking ahead, Barrick estimates gold production between 3.15 and 3.5 million ounces, down from 3.91 million ounces in 2024 and excluding contributions from the Loulo-Gounkoto project. Bristow also expressed a hopeful outlook towards resolving the ongoing issues in Mali, suggesting, “A mutually beneficial solution can be found.”
Reports indicate that negotiations with the Mali government regarding compliance with the 2023 Mining Code and a $195 million settlement to restart operations at Loulo-Gounkoto have been paused. Bank of America maintains a neutral stance on Barrick, emphasizing the company’s solid asset base but identifying potential obstacles from resource nationalism affecting their operations in Mali and difficulties at the Pueblo Viejo site in the Dominican Republic.
In summary, Barrick Gold’s recent $1 billion share buy-back initiative stems from a belief that its stock has been unduly affected by challenges in Mali, leading to a notable increase in net earnings. Despite improved financials, analysts express caution due to anticipated production declines. The company remains committed to finding a resolution in Mali while adjusting future production guidance.
Original Source: www.miningmx.com
