Major Gold Miners: GDX, GOLD, NEM vs UGL

[drbubb]

Major gold miners: GDX, GOLD, NEM etc: 56% UGL (2x Gold)

Barrick Gold looks relatively cheap, in July 2021 / Link: tiny-/gdxnem : live GOLD, Gdx: Jr: UGL: Apx: Cyc:

stockcharts RATIO charts

Resistance: Gold-$1885 = UGL-$59.  Will it Break?

GDX vs SPY etc.  update: GDX: $38.28 / SPY:$451 = ratio 8.5%

GOLD ... 4yr: 2yr: YTD: 10d / Last $18.75 +0.13.  Barrick Gold's 36 cent Div provides 1.92% Yield

GOLD Barrick vs UGL .. update: fr.2020: $18.37 / $58.26, UGL: r-31.5%  / $31.09, GDX: r-00%, Yield: 1.96%, PER: 16.5

Ratio: $18.37 / $58.26, UGL: r-31.5%

Ratio: $18.37 / $31.09, GDX: r-59.1%

==

GOLD : All-log: 10yrL: 10yr: 5yr: / Gold: $21.13 -- NEM:  All-log: 10yrL: 10yr: 5yr: / Gold: $63.98

RATIO: GOLD to NEM: 33% or 1/3 of NEM price : chart:

Ratio: GDX to GLD: about 20% : chart

Ratio: LIKE CLOCKWORK!  Buy at 52%, Sell at 60%+

DATA: GOLD vs. UGL (2x$Gold) +GOLD, NEM: “B:52%, S:60%+”

Date  :  GLD  :  UGL  : %Ugl : Gold , %-Ugl : NEM, %-Ugl: G/nem
08.30: 32.17: 59.45: 54.1%: 19.81, 33.3%: 57.51: 96.7.%; 34.4%
07.30: 34.92: 59.92: 58.3%: 21.77, 36.3%: 62.82: 105.%; 34.7%

6/ ’21: 33.98: 57.22: 59.4%: 20.68, 36.1%: 63.38: 111.%: 32.6%
Ye’20: 36.02: 68.20: 52.8%: 22.78, 33.4%: 59.89: 87.8%: 38.0%
6/’20: 36.68: 64.83: 56.6%: 26.94, 41.6%: 61.74: 95.2%: 43.6%
Ye’19. 29.28: 49.05: 59.7%: 18.59, 37.8%: 43.45: 88.6%: 42.8%
Ye’18: 21.09: 37.41: 56.4%: 13.54, 36.2%: 34.65: 92.6%: 39.1%
Ye’17: 23.24: 40.67: 57.1%: 14.47, 35.6%: 37.52: 92.3%: 38.6%
4yrE : ===== 48.84: 295.% ====: 35.8%: ==== : 90.3%: 39.6%

Websites: GOLD: NEM: GDX ...

UGL is Key. Correlation is High ! But swings are bigger, with AGQ-Silver-2X

=== UPDATE, Oct. 2022: "Pathfinder" SLV ===

SLV / SILVER AS PATHFINDER...  vs. UGL (2x Gold), and GDX
SLV -etc.  5yr: 2yr: Ytd: 10d / $18.99 / $50.11 (UGL)= 37.9%. GDX: $25.37, 50.6% UGL

Looks to me now that SLV / Silver (blue line) is a "pathfinder" now leading UGL back up.  At the TOP, it lagged, suggesting that early MarchTop could be the end of the Rally. UGL "blew off", shoot up most on its own, not confirmed by Silver. Metals were weak after that.  Now SLV has gotten ahead of UGL. Seems ready to lead to higher.

UGL is a heavier Line, But is slower to make the Turn than SLV.  In the last few weeks, SLV is now suddenly STRONGER than UGL.  This may be signal -ing an important Upturn in all precious metals

RATIO, SLV: $18.99 / $50.11 (UGL)= 37.9%.

Longer Term comparison

UGL-etc.. All: 10yr: 5yr: 2yr: Ytd: 10d/ $50.12; SLV: $18.99, GDX: $24?

===

[drbubb]

"BIG 4" > Jan.2020: Jan.2018: 1yr: 10d:  1/25: C$5.45, Gold: $19.49, C$24.61, Rgld: $103.20, Mux:$0.93, C$1.20



GOLD vs UGL: 6mo: 3mo: from Oct.1, 2021: 

 

Barrick GOLD -w/UGL: ytd: 3yr: 6mo: 10d/  $21.72 +0.15 / Gdx: $35.09= 61.9% / Ugl: $59.66 = 36.4%

GOLD vs. UGL (2x$Gold) and NEM: "Buy near 1/3 !"

Date  :  GLD  :  UGL  : %Ugl : Gold , %-Ugl : NEM, %-Ugl: G/nem
07.23: 169.09: 59.57: 284.%: 20.74, 34.8%: 60.21: 101.%; 34.4%
6/ ’21: 165.63: 57.22: 289.%: 20.68, 36.1%: 63.38: 111.%: 32.6%
Ye’20: 178.36: 68.20: 262.%: 22.78, 33.4%: 59.89: 87.8%: 38.0%
6/’20: 167.37: 64.83: 258.%: 26.94, 41.6%: 61.74: 95.2%: 43.6%
Ye’19: 142.90: 49.05: 291.%: 18.59, 37.8%: 43.45: 88.6%: 42.8%
Ye’18: 121.28: 37.41: 324.%: 13.54, 36.2%: 34.65: 92.6%: 39.1%
Ye’17: 123.65: 40.67: 304.%: 14.47, 35.6%: 37.52: 92.3%: 38.6%
4yrE : ====== 48.84: 295.% ====: 35.8%: ==== : 90.3%: 39.6%

-w/UGL: ytd: 3yr: 6mo: 10d /

RATIO:  GOLD to UGL: 35% or near 1/3 of UGL price

RATIO:  GOLD to NEM: 33% or 1/3 of NEM price

===

[drbubb]

VALUATION & 6 mo Charts

Relative Valuation Stock: > Larger GDX components

Stock  Last : BkVal: E.P.S.: PE-r :  Div.:  Yield: MkCap: Debt :  Ebitda:  EV/e Npat: lastQ >/sh., prev, % chg

Gold : 20.83: 13.31: $1.38: 15.0: $0.38: 1.68% $37.1B $5.15B $7.05B: 6.34 2.46B 538M: 0.29, 0.35 - 17.1%
NEM : 63.19: 28.87: $3.19: 19.8: $1.75: 3.48% $50.6B $6.81B $5.99B: 8.79 2.37B 538M: 0.74, 1.06 - 30.2%
GDX : 33.89: 17.60: $2.03: 16.7* $0.20 0.58% $14.8B =====================>   ??   :
FNV : 147.8:  CAD : $3.12: 47.3: $1.20: 0.81% $28.2B $1.02B $910.M: 29.9 597M: 192M: 0.84, 0.85 - 1.18%:
Rgld : 116.5: 37.03: $4.10: 28.3: $1.20: 1.03% $7.64B $155M $445.M: 16.7 270M: 000M: 0.84, 0.92 - 8.70%
WPM 43.89: 12.95: $1.28: 34.4: $0.56: 1.28% $19.7B $3.48B $824.M: 24.2 575M: 162M: 0.36, 0.35 +3.04%
KGC : $6.19: $5.32: $1.08: 5.73: $0.12: 1.86% $7.81B $2.00B $2.19 B: 4.19 1.37B: 150M: 0.15. 0.27 - 44.5%
KL.   : 41.64: 19.19: $2.73: 15.3: $0.75: 1.80% $11.1B $26.1M $1.66B: 6.24 746M: 161M: 0.63. 0.98 - 35.7%
GCM: $4.92: $4.52: $1.58: 3.49: $0.18: 3.66% $484M $61.7M $176M: 1.66 $95.M: > old data?

Vs. Gold Production

x

====

*Based on 16.9 PER and P/B at r-1.95, with GDX at $34.28 > Link

6mo: 10d: 10d-w/UGL/ Gold: 20.83/33.89: 61.5% / NEM: 63.19/33.89: 186.5%

Top 10 Holdings (62.45% of Total Assets)

Get Quotes for Top Holdings

Name	Symbol	%Assets
Newmont Corp	NEM	15.50%
Barrick Gold Corp	ABX.TO	11.23%
Franco-Nevada Corp	FNV.TO	8.46%
Wheaton Precious Metals Corp	WPM.TO	6.05%
Newcrest Mining Ltd	NCM.AX	4.92%
Agnico Eagle Mines Ltd	AEM.TO	4.31%
Kirkland Lake Gold Ltd	KL.TO	3.55%
Northern Star Resources Ltd	NST.AX	2.95%
Kinross Gold Corp	K.TO	2.76%
Gold Fields Ltd ADR	GFI.JO	2.72%

[drbubb]

Barrick produced 4.8 Million Oz of Gold:  At $37 Billion, that's $7,700 per Oz of Production

At under $21, "A solid company to buy, if you want an exposure to Gold"

Barrick Gold Stock Analysis

Does Barrick Gold Stock SHINE? | GOLD Stock Analysis

 

[drbubb]

BEST BIG BOY?  GOLD wins with 6 points.  NEW next at 1 point,  FNV= 0

Newmont vs Barrick Gold vs Franco Nevada stock analysis | Best gold stock to BUY | NEM GOLD FNV

==

[drbubb]

WHY did Buffet Buy BARRICK?

He wanted Cash flow, and LEVERAGE to the Gold price

100 / 1350 = + 7.4%.   $472M / $5 B = +10%

TROPHY Assets: 5 of the 10 largest Gold mines

FAST-rising Cash Flow, allowed Debt retirement, and is now going to shareholders

==

[drbubb]

Stalled? Or ready to "slingshot" in catch-up move?

Compare: ... 10d-w/UGL/ +GDXJ

Major Gold stocks are hardly budging, despite UGL (2x Gold) being up 8%

There's a 7% Delta for NEM

 

[drbubb]

Barrick on Course to Achieve 2021 Production Targets -- Commodity Comment

On gold:

"Preliminary Q2 gold production was lower than Q1, with planned maintenance shutdowns at Nevada Gold Mines' processing facilities further impacted by a mechanical mill failure at Carlin's Goldstrike roaster, as well as planned maintenance at Pueblo Viejo."

"As previously guided, Barrick's gold production in the second half of 2021 is forecast to be higher than the first half."

On copper:

"Preliminary Q2 copper production was slightly higher than Q1."

"Copper sales in Q2 were in line with production, but 15% lower than the previous quarter, as Lumwana sold a higher portion of its stockpiled concentrate in Q1 2021."

"We continue to expect the Company's copper production in the second half of 2021 to be stronger than the first half, mainly driven by higher grades from Lumwa

 07/15/21

Barrick second-quarter gold output falls 5.4% on maintenance shutdowns

July 15 (Reuters) - Barrick Gold Corp (GOLD), said on Thursday second-quarter gold production fell 5.4% from the previous quarter, dented by planned maintenance shutdowns at Nevada Gold Mine in the United States and Pueblo Viejo in the Dominican Republic.

Total preliminary gold production fell to 1.04 million ounces in the three months ended June 30, from 1.10 million ounces in the first quarter, the company said.

Analysts on average had expected production of 1.15 million ounces, according to Refinitiv IBES.

7:40 PM ET 07/15/21

Dual Listed Barrick Gold Edging Higher In US Pre-Market As Says "On Course" to Achieve 2021 Production Targets

[drbubb]

As I put this thread together, I saw how weak many Gold shares are now. 

Look at GDX-toGLD ratio, and GDXJ-toGLD, now at 27%, despite the Gold price being strong

(David Hunter thinks that GDXJ could hit $100 this year, and GLD $234- ie Gold $2500/ 10.7 - that would be a 42.7% ratio. 

His target for GDX to Gold is: 60/234= 25.6%, up from the current 17%. )

In fact, I should be looking at the comparison of Gold shares to UGL, the 2x Gold etf, because Gold shares are a leveraged play on Gold

Here's the GDX to-UGL ratio (5 years)

 

...And the GDX to-UGL ratio (5 years)

At yesterday's Low of 76%, it was very close to the bottom of the Normal 75%-87.5% range

[drbubb]

The Power of the Fed (full documentary) | FRONTLINE

"They increased enormously the Wealth at the Top. And Inequality."

145,212 views ..  Jul 14, 2021

[drbubb]

GDX Dropped back to the lower end of the channel, & Gold fell less

GDX ... update : 10d / Last: $33.92 -1.05, -3.0%

GOLD/ barrick -etc ... update : 10d / Last: $20.86 -0.41, -1.7%; / GDX ($33.92)= r-xx%

GDX 5-yr:

[drbubb]

Gold : $20.72 + 0.18, +0.88%
GDX : $33.00 + 0.11, +0.11%

I bought a slug of GOLD calls before and after the price drop
And am now near breakeven on the overall package

Barrick will release its Q2 2021 results on Monday, August 9.

Barrick resumes operations at Hemlo after fatality

TORONTO - Miner Barrick Gold has resumed surface operations including processing at its Hemlo mine in Canada's Ontario province after a worker fatality last week suspended mining, a company spokeswoman said on Tuesday.

+++

According to the CEO of Barrick Gold, Mark Bristow, due to an aggressive near-mine exploration program, Kibali was continuing to replace its reserves faster than it was mining them, and now has a resource base that is approaching the 2013 levels when the mine first went into production. The company also said that significant exploration successes could extend the Tongon gold mine"s life. Bristow said 10 years after it went into production Tongon could get a new lease on life thanks to promising results from near-mine exploration campaigns designed to replace the mine"s depleted reserves.

[drbubb]

Looking Back at Q1 Results...

Barrick will release its Q2 2021 results on Monday, August 9.

Financial Results

                         Q1'21 Q4'20 Q1'20
In $ Millions
Revenue ($M).        2,956 3,279 2,721
Net earnings ($M).    538   685.   400
Adj. net earnings    7 507    616    285
Adj. EBITDA12.        1,800 2,106  1,466
Net cash from
Operating activities 1,302 1,638   889
Free cash flow         6 763 1,092   438
Net earnings/ sh ($)  0.30  0.39   0.22
Adj. net earns./ sh.    0.29  0.35    0.16
Cap’l expenditures     424   445    364
Cash & equiv.($M)   5,672 5,188 3,327
Debt, net of cash      (519)   (33) 1,852
Dividend /share ($)   0.09   0.09   0.07
====
Where will the excess Cash Flow go?
+ Strong free cash flow6 of $763 million in Q1
+ Net cash5 improved by $0.5 billion from Q4 after
advanced tax payment of $72 million in Nevada
+ Industry-leading cash return to shareholders in 2021
+ Sustainable quarterly dividend of $0.09 per share in Q1

+ $750 million return of capital approved by shareholders
at AGM equating to $0.42 per share in 2021 – to be paid

in three equal tranches in June, Sep., Dec. (/3= $0.047)

> https://s25.q4cdn.com/322814910/files/doc_presentations/2021/05/Barrick-Q1-2021-Results-Presentation.pdf

[drbubb]

Fair Value: about $21.50?

The stock of Barrick Gold (NYSE:GOLD, 30-year Financials) appears to be fairly valued,

according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $21.3451 per share and the market cap of $38.1 billion, Barrick Gold stock shows every sign of being fairly valued. GF Value for Barrick Gold is shown in the chart below.

... it is important to carefully review the financial strength of a company before deciding whether to buy its stock. Looking at the cash-to-debt ratio and interest coverage is a great starting point for understanding the financial strength of a company. Barrick Gold has a cash-to-debt ratio of 1.10, which is worse than 72% of the companies in Metals & Mining industry. GuruFocus ranks the overall financial strength of Barrick Gold at 6 out of 10, which indicates that the financial strength of Barrick Gold is fair.

... Its operating margin is 38.27%, which ranks better than 90% of the companies in Metals & Mining industry. Overall, the profitability of Barrick Gold is ranked 6 out of 10, which indicates fair profitability. This is the revenue and net income of Barrick Gold over the past years:

> source:  https://www.gurufocus.com/news/1475636/barrick-gold-stock-gives-every-indication-of-being-fairly-valued

OTHER Gold Miners: vs/ GOLD "fairly valued" at $20.83 and EV/ebitda of 6.34, PER: 15.0

NEM : Significantly Overvalued (8.79, 19.8)

FNV : Fairly Valued ($147.8: 29.9, 47.3)

Rgld : Fairly Valued ($116.5: 16.7, 28.3)
Wpm: Fairly Valued ($43.89: 24.2, 34.4)
KGC : Fairly Valued ( $ 6.19: 4.19, 5.73)
KL.   : U'valued -25% ($41.64: 6.24, 15.3)
DPM: ???

GCM: $4.92: $4.52: $1.58: 3.49: $0.18: 3.66% $484M $61.7M $176M: 1.66 $95.M: > old data?

====

Kirkland Lake Gold reported positive production and sales information.

The company produced 379,000 ounces of gold in the second quarter, 9% above consensus. Second quarter sales were 365,000 ounces, 5% above consensus. The company expects to end 2021 in the top half of 1.3-1.4-million-ounce guidance. Dundee Precious Metals reported preliminary production results for the second quarter as well, with consolidated gold output of 85,100 ounces exceeding consensus of 73,700 ounces. Gold production at Chelopech was very strong with 52,600 ounces benefiting from higher grades and improved recoveries. Performance remained solid at Ada Tepe. Dundee has produced 155,400 ounces and puts the company in good shape to aim for the higher end of the guidance range.

Weaknesses

[drbubb]

Newmont declares quarterly dividend of $0.55 per share

0.55 x 4= $2.20* up from $1.75

the declared quarterly dividend of $0.55 per share is in line with the previous quarter and significantly higher compared to a dividend of $0.25 per share a year ago.

Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. The company’s portfolio of assets is anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed in the S&P 500 Index. The company was founded in 1921 and has been publicly traded since 1925.

> https://www.kitco.com/news/2021-07-21/Newmont-declares-quarterly-dividend-of-0-55-per-share.html

NEM $2.20 / $60.36  = 3.64%. GOLG at $20.90, has a yield of less than half that, at 1.7%

GOLD: $0.09 x4= 0.36 / $20.90= $1.72.  (add on Return of Capital payment, of $0.14, then $0.23/qtr; $0.92 pa.) : 4.40%

Next Record date for Gold is Aug.30th

[drbubb]

Newmont posts a healthy $1.6 billion adjusted EBITDA for the quarter

Rajan Dhall,  July 22, 2021 07:25

(Kitco News) - Newmont  (NEM:NYSE) recorded $1.6 billion in adjusted EBITDA in their latest quarterly results. In addition to this world's largest gold miner produced 1.4 million attributable ounces of gold and 303 thousand attributable gold equivalent ounces from co-products.

Newmont reported gold CAS of $755 per ounce and AISC of $1,035 per ounce. Full-year results continue to be back-half weighted, in line with guidance ranges. Generated $993 million of cash from continuing operations and $578 million of Free Cash Flow (97 percent attributable to Newmont)*

The producer declared a Q2 dividend of $0.55 per share, consistent with the previous quarter. The company repurchaed $149 million as part of its $1 billion buyback program. Newmont ended the quarter with $4.6 billion of consolidated cash and $7.6 billion of liquidity. The net debt to adjusted EBITDA ratio stands at 0.2x and it reduced $550 million of debt outstanding with available cash in April 2021

Looking ahead, Newmont completed the acquisition of GT Gold in May 2021, increasing its interest in the prospective Golden Triangle. The company also approved full funding for Ahafo North in July 2021, meeting Newmont’s internal hurdle rate at the base assumption of $1,200 per ounce gold price; it expects to deliver an internal rate of return of over 30 percent at current prices

> more: https://www.kitco.com/news/2021-07-22/Newmont-posts-a-healthy-1-6-billion-adjusted-EBITDA-for-the-quarter.html

[drbubb]

update / top $2,089 / $194.45= r10.74 = Gold: $1,891 /178.56= r10.59, LTPZ: 88.62 =2,01x, UGL:$68.2 at 12.31.20 /

Gold: $1,830 / GLD: $172 =r10.63, 5.11.21 > $1,804 / $169 = r10.67, LTPZ: $88.5 =1.91x UGL: 59.27 at 7.22.21

chart#2: LTPZ: $88.7 / UGL: 59.27 = r1.49x at 7.22.21

LTPZ : $88.7 vs, Yr.H: $90.07

[drbubb]

Gold stocks versus TLT Bonds

GDX, TLT etc... from Mid-2020: 5yr: 3yr: 1yr: 10d :: GDX: 33.68 / TLT: 149.64 = Ratio-22.51% at 7/27

Ratio GDX: 33.68 / TLT: 149.64 = Ratio-22.51% at 7/27

==

[drbubb]

Higher costs ahead?

Newmont had a solid second quarter but grouses about higher costs ahead. St. James Gold stumbled on word that it is sending crews to its grassroots gold properties in Newfoundland while getting set to drill Florin, in Yukon. Loncor Gold has raised cash for Imbo in the DRC. 

more...

[drbubb]

Barrick Gold secures exploration licenses in Egypt

Vladimir Basov Tuesday July 27, 2021 11:35

(Kitco News) - Barrick Gold (NYSE:GOLD)(TSX:ABX) announced today that it has been awarded four exploration licenses for 19 blocks following its participation in the International Bid-Round (1)/2020 led by the Egyptian government for exploration of gold and associated minerals in the highly prospective Eastern Desert region of the country.

According to the company’s statement, Eastern Desert is part of the Proterozoic Arabian Nubian Shield, which hosts the giant Sukari deposit and numerous other gold occurrences, but which has seen no recent systematic exploration.

Barrick said it intends to work closely with the Egyptian Mineral Resource Authority and other participating exploration and mining companies, over the period of a year, to finalize the terms of Egypt’s exploitation license agreement which will apply to the industry.

[drbubb]

Good day for Gold stocks, despite small +0.5% Gold rise

Sym. : Last  : change: % chg.
GLD  : 169.29 +0.85,  + 0.50%
UGL  : $59.66 +0.58,  + 1.00%
GDX  : $34.19 +0.51,  + 1.51%
GOLD: $21.34 +0.35, + 1.67%
NEM  : $61.88 +0.56, + 0.91%
Gcm.t :  $4.70 +0.09, + 1.95%

KL chart / $39.81 +$0.48, + 1.2%

KL - Kirkland Lake Gold Reports Record Net Earnings in Q2 2021

We returned $158.6 million to shareholders during the first half of 2021 and have returned an additional $37.7 million in July through our Q2 2021 dividend payment and by repurchasing 945,000 shares through the NCIB.”  

• RECORD NET EARNINGS AND EPS IN Q2 2021
  Net earnings of $224.2M ($0.91/share), 67% increase from Q2 2020, 51% higher than Q1 2021; Adjusted EPS⁽¹⁾of $246.9M ($0.92/share) in 02 2021
   
• STRONG PRODUCTION GROWTH IN Q2 2021
  379,195 oz in Q2 2021, up 15% from Q2 2020 and 25% the previous quarter; 682,042 oz in YTD 2021, 3% increase from YTD 2020
   
• Q2 2021 UNIT COSTS BEAT FY 2021 GUIDANCE
  Q2 2021 op. cash costs⁽¹⁾ of $431/oz sold, AISC⁽¹⁾ of $780/oz vs FY 2021 guidance of  450 – $475/oz and $790 – $810/oz, respectively

[drbubb]

GOLD "upside-lean" option package

Barrick has moved up from my average cost level of $20.65

==== : #, Mo. Strike: MidPt: @$21.34 +0.35, +1.67%
Short : 10 Oct $23 P   (1.68) : ( 1,680)
Long  : 10 Oct $20 C   $1.93 : $ 1,930
Long  : 10 Sep $20 C   $1.70 : $ 1,700
======== Net Value:  $1.95 : $ 1,950 / $1.21 +61.2%
Hedge U-Value $20 + $1.95 =$ 21.95 +0.74, +3.49%
 = $740, 2.09x Gain in underlying value vs GOLD

The package should perform like a 2X underlying position as prices rise, and 1X underlying if they drop

 

[drbubb]

Barrick GOLD -w/UGL: ytd: 3yr: 6mo: 10d/  $21.72 +0.15 / Gdx: $35.09= 61.9% / Ugl: $59.66 = 36.4%

3yr: 6mo: 10d/  $21.72 +0.15 / Gdx: $35.09= 61.9% / Ugl: $59.66 = 36.4%

[drbubb]

Barrick on target to meet 2021 guidance, reports Q2 beat on higher gold price

Kitco News | Aug 9

(Kitco News) - Higher gold prices helped the world's second-largest producer beat earning expectations as production fell in the second quarter.

/ 2 /

Barrick CEO: Gold’s real rally hasn't even come yet; Mark Bristow on Q2 results, forward guidance

 

Mark Bristow, CEO of Barrick Gold, discusses with David Lin, anchor for Kitco News, why our current environment may be similar to that of 2008's, when gold initially lagged and then spiked three years later.

"I always take people back to 2008, 2009, the Global Financial Crisis, all those troubles. The market didn't really react to that because it was desperate to see us come out of it before we really appreciate the damage that it had made. It was only 2011 when we saw everyone react to the damage, and of course the gold price went up and it stayed up until past 2013," Bristow said. "I think we're finding the same thing now."

Monday, Barrick Gold released second quarter financial results and reported revenues of $2.89 billion in the second quarter of 2021, down from $3.055 billion in the same period a year ago.

Of the $2.89 billion in total sales in Q2, $2.5 billion was gold sales, while $234 million was copper, or roughly 10% of sales.

Bristow said that the company plans to expand copper production to about 20% of the business to meet the demands of the electrification of the economy and as gold deposits get bigger in scale.

[drbubb]

Barrick Gold Valuation Too Low To Ignore

Apr. 05, 2021    Barrick Gold Corporation (GOLD). AEM, AU, AULGF...77 Comments

Summary

• Barrick's weak stock quote the last six months has opened a strong buy opportunity for intelligent investors.
• Valuations on free cash flow and operating income are absurdly low vs. a U.S. stock market near-record overvaluations.
• Negative real interest rate spreads are widening, a huge positive for gold assets going forward.

I have not owned Barrick Gold (NYSE:GOLD) in many years, until last week. The main reason I have avoided shares in one of the leading gold miners in the world is other producers have looked more appealing. Alternative mining choices have been less expensive in valuation, with better growth prospects and stronger balance sheets. Well, the company has made substantial progress cutting costs and paying down debt the last two years, while the stock quote has underperformed, especially in late 2020 and early 2021. The fact Barrick also extracts around 450 million pounds of copper annually ($1.8 billion in revenues at current spot commodity pricing and 15% of total sales) is another positive argument for ownership that may not be properly discounted by Wall Street. The end result of all the moving parts is Barrick has morphed into a top "value" play in the mining sector into April.

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Over the last year, I have mentioned Newmont Mining (NEM) here, Pan American Silver (PAAS) here and AngloGold Ashanti (AU) here as being my favorite majors in the gold/silver mining arena. Today, I am adding Barrick to this elite mix of names for investors. Specifically, an industry low price to free cash flow ($3.4 billion in 2020 FCF) and operating earnings setup is screaming the company should now be viewed as a "must own" in the sector.

Cutting Costs and Slashing Debt

The latest Q4 earnings report highlighted improving trends in cash costs, all-in-sustaining-costs (AISCs), declining debt totals ($2.2 billion in net debt reduction for 2020 alone), and relatively steady management expectations for even better numbers between 2021 and 2024.

> more: https://seekingalpha.com/article/4417575-barrick-gold-valuation-too-low