Barrick Mining: Strong Quarterly Results and Strategic Restructuring
Barrick Mining achieved significantly higher production in the second quarter than analysts had expected. At 796,000 ounces of gold, the company exceeded its own forecast by about 3%. This represents an 11% increase compared to the previous quarter. Copper production reached 56,000 metric tons. Adjusted net income rose 70% to USD 1.36 billion, while adjusted EBITDA increased 51% to USD 2.5 billion. The margin improved from 55% to 60%. Although free cash flow fell by 33%, this was due to one-time items. Excluding a one-time payment of USD 400 million related to the Loulo-Gounkoto mine in Mali, cash flow would have increased by 60%. Since the beginning of the year, free cash flow has more than doubled to USD 1.4 billion compared to the previous year.
The agreement with Newmont regarding the joint venture in Nevada is a positive development. The dispute over Fourmile, Barrick’s most promising project with a potential annual production of up to 750,000 ounces, has been settled. Newmont will pay USD 1.95 billion and contribute its own projects, while Barrick remains the majority shareholder and operator with a 61.5% stake. Analysts view Newmont as the winner of the negotiations. On the other hand, this clears the way for the planned initial public offering (IPO) of the North American units. Barrick plans to list 10–15% of its North American business on the New York Stock Exchange by the end of the year. The majority of the net proceeds are expected to be returned to shareholders. The operational collaboration in Nevada will be realigned to optimize processing capacities and reduce transportation distances.
Financially, the company is well positioned with USD 1.2 billion in net liquidity and an unused credit line of USD 3 billion. Significant debt maturities are not due until 2033. A regular dividend of USD 0.175 per share will be paid. In addition, Barrick plans to pay a variable dividend, so that a total of 50% of free cash flow will be distributed. In the second quarter, the company repurchased shares worth USD 1.2 billion. Capital expenditures were reduced to USD 3.8 to 4.2 billion due to delays in the construction of the Reko Diq facility.
The expansion of Lumwana, on the other hand, is proceeding according to plan. By 2028, copper production there is expected to rise from 220,000 to up to 285,000 metric tons. The annual forecast for production and costs remains unchanged.
Lahontan Gold: Updated Mineral Resource Estimate
The updated mineral resource estimate from August 17 shows why the Santa Fe project in Nevada is so exciting. The previous estimate was increased by 22% to 1,195,000 ounces in the “indicated” category and 1,190,000 ounces in the “inferred” category. Of particular note are the oxide resources in the Slab and York shallow deposits, which increased by over 37%. They could become the decisive factor for the planned first production phase using low-cost heap leaching. The strategic significance of this development lies in the project’s dual approach. While the near-surface oxide zones pave the way for a rapid start to production, the indicated sulphide resources in the Santa Fe main deposit, with grades of 1.41 g/t gold equivalent (AuEq), and the inferred resources, with a grade of 0.86 g/t, offer long-term potential. Management is relying on a two-stage leaching process for the sulphide material to optimize recoveries. The first column leaching tests are already underway.
The latest drill results from the Calvada-Central Zone underscore the quality of the deposit. CAL26-03C intersected 30.8 m grading 0.93 g/t AuEq, including a high-grade zone of 10.7 m at 2.18 g/t AuEq. At Calvada East, 1.25 g/t gold was found over 12.2 m. The discovery of significant gold mineralization in Tertiary volcanic rocks along the Summit Fault opens up a new exploration target outside the current resource boundaries. The ongoing investigation of historical tailings could unlock additional potential. Approximately 100 drill holes at four heap leach pads are expected to provide information on about 200,000 ounces that, according to historical records, may still be contained in the tailings. These could be extremely low-cost ounces, since the material is already crushed.
With approximately USD 12 million in cash, the company is well-positioned for the upcoming development phases. The preliminary economic assessment is scheduled for an update in the near future. For the first time, this update will also analyze the processing of the sulphide resources, thereby laying the foundation for the mine plan. Permitting processes at the state and federal levels are proceeding as planned. The company continues to target the start of mine construction in 2027. The existing infrastructure, such as secured water rights and an existing substation, makes many aspects of the project much easier. The planned NYSE listing could serve as a further catalyst.
Wheaton Precious Metals: Record Quarter
Wheaton Precious Metals’ second quarter was the strongest in the company’s history. Revenue, profit, and operating cash flow reached new records, driven by a 61% increase in the gold-equivalent price and a 14% increase in sales volume. The operating margin improved to just under USD 3,900 per ounce. The key driver was the expansion of the Antamina silver stream. Since April, Wheaton has held 67.5% of silver production, increasing its attributable volume by 56%. However, lower grades and maintenance work dampened the full effect. This means that the second half of the year should perform better.
The USD 4.3 billion payment to BHP for Antamina weighed on the balance sheet. Net debt now stands at just under USD 1.9 billion, with available liquidity at USD 2.6 billion. However, operating cash flow of over USD 200 million per month shows that debt reduction is already underway. The project pipeline is financed and under construction; Koné, Kurmuk, Blackwater, and Platreef are already operational. By 2030, Wheaton aims to increase production by 50% to 1.2 million gold-equivalent ounces without making any further acquisitions. The dividend was raised slightly to USD 0.195, though the yield remains modest at 0.54%.
In the short term, a lot depends on the major Antamina investment. Another weak quarter would be a warning sign. In the long term, Peñasquito, with 9 years remaining, is the smallest of the three main streams. Salobo and Antamina will continue well beyond 2035. The forward price-to-earnings (P/E) ratio of 27.4 is below the five-year average, despite the record figures. Current streaming investments should be viewed as a peak. Analysts expect a significantly positive free cash flow to return starting in 2028. The combination of a moderate valuation, growing production, and a high-margin business model makes the stock attractive to long-term investors. This is contingent on rapid debt repayment in the coming quarters.
The macroeconomic environment with record-high central bank purchases, surging US national debt, and expectations of interest rate cuts remains favourable for the gold sector. Barrick Mining impresses with operational strength and resolves a strategic conflict with the Nevada agreement. Lahontan Gold is focusing on its Santa Fe project, which offers potential with a 22% higher resource estimate and low-cost heap leaching. Wheaton Precious Metals posted a record quarter but must first quickly reduce the mountain of debt resulting from the USD 4.3 billion Antamina investment to benefit from its high-margin streams in the long term.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as “Relevant Persons”) currently hold or hold shares or other financial instruments of the aforementioned companies and speculate on their price developments. In this respect, they intend to sell or acquire shares or other financial instruments of the companies (hereinafter each referred to as a “Transaction”). Transactions may thereby influence the respective price of the shares or other financial instruments of the Company.
In this respect, there is a concrete conflict of interest in the reporting on the companies.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is also a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Risk notice
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.
The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.