Several key events — including virus-related shutdowns, monetary stimulus and a resultant weak U.S. dollar — have conspired to put gold and silver on track for another solid year of gains, suggests Clif Droke, editor of Cabot Wealth Network.
We think Barrick Gold (GOLD), the world’s second-largest gold mining company, is well positioned to benefit from a continuation of gold’s long-term bull market and will be a big winner in 2021.
The metal’s improving fortunes allowed the company to deliver 125% per-share earnings in 2020, while revenue (up 28% for the year) has been trending higher since 2018.
What’s more, higher gold prices have also made growth through M&As attractive for miners once again, with Barrick merging with Randgold Resources in 2019.
It further combined its Nevada mining assets with Newmont Mining to create the joint venture company Nevada Gold Mines, the world’s largest production complex.
Barrick forecasts all-in sustaining costs (a key metric for miners) at around $966 per ounce as of Q3, well below current prices, and giving the firm plenty of room to take on additional projects. Consequently, analysts are predicting even more top- and bottom-line growth in 2021.
The company is disposing of non-core assets, rapidly paring its long-term debt and has announced a 10-year plan to become the world’s most valued bullion company. All told, Barrick has every reason to be optimistic about its future.
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