Global Expert Bets on Barrick

08/26/2019 5:00 am EST

Focus: COMMODITIES

Vivian Lewis

Editor and Publisher, Global Investing

Barrick Gold (GOLD) — based in Toronto, Canada — just reported its latest results; the company produced 27% more gold in its second quarter, asserts international investing specialist Vivian Lewis, editor of Global Investing.

In addition, the company will produce even more now that the way is clear for it to acquire the rest of Acacia Mining which operates in Tanzania after paying a fine of ~$300 million for allegedly underpaying its taxes.

Its Q2 income hit $223 million vs a $76 million loss in the prior Q2. New production came mainly from Mali and Argentina. Our position in the stock is up over 36% year-to-date.

Adjusted income hit $154 million or 9¢ per shares vs. prior year Q2 level of $81 million and 7¢ a share. (There were more shareholders thanks to its buying Randgold.)

It was boosted by Goldman Sachs and Citigroup raising their 6-month gold price forecast to $1600 per ounce. Barrick now expects to produce 5.6 million oz. of gold this calendar year, helped also by its mining joint venture with Newmont Goldcorp (NEM) in Nevada.

It may divest part of its 50% stake in Kalgoorie mine in Oz, perhaps to the other owners, Newmont. It also wants to sell to a local gold firm a stake in its Senegal Massawa mine.

New CEO Mark Bristow, who came on in January — after it bought Goldcorp — said it was also exploring for a large Canada mine because it is “underinvested” in its homeland and may develop copper mining in Congo Kinshasa. Meanwhile, Q2 results were slightly below forecasts according to Trefis Research.

With markets in disarray over bond inversion and political risks a gold mine such as buy-rated Barrick is the answer. For those who prefer investing through exchange-traded funds, we also recommend SPDR Gold Trust (GLD) and iShares Gold Trust (AIU).

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