Barrick Gold Stock: A Stock To Watch Now?
With gold stocks up near decade-highs, one gold stock keep’s coming up: Barrick Gold (GOLD Stock Report) (TSX: ABX). At first glance, some people might mistake it as an ETF for gold. But it is not an ETF, it’s a gold company out of Toronto Canada. Barrick Gold is doing so well it raised its Dividend 40% for Q4.
If the price of gold stays near decade highs, we could see these numbers rise. Barrick Gold’s adjusted net earnings per share are also up an impressive 46 % on the year. Furthermore, the company reduced its debt net of cash to 2.2 billion. This was down 47 % from 2018.
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All of this is because Barrick Gold is meeting its expected full-year gold production. In fact, it is at the upper ends and their copper production is above guidance as well. But is Barrick Gold stock a name to consider right now?
Gold Prices Rise: Barrick Gold Stock Reaches New Highs
Investors always like to be first to a stock before the move. Buy low, sell high is the name of the game. With the Coronavirus killing the markets, we have no clue when this will end. Just this week we have the virus spreading to Italy and Iran. On top of this, health organizations suggest the economy could have a long-lasting effect across the globe.
With gold being a safe haven during market volatility, some expect gold to reach $1,700 or better. Paul Tudor Jones, Tudor Investment Corporation said in an interview, “I think one of the best trades is gonna be gold. If I had to pick my favorite [bet] for the next 12 to 24 months, it’d probably be gold.”
“If [gold] goes through $1,400, it goes to $1,700 rather quickly”Paul Tudor Jones
Even if gold pulls back to 1,500, it could still see the same numbers coming from the mines as far as production is concerned. We have also had an Inverted yield curve 3 times in the past 12 months. This is an early recession sign according to many economic experts.
Overall Barrick Gold could be worth watching as you can see on the daily chart. The stock follows gold very close. This is one thing that you want to look for when investing in gold stocks. With gold prices looking to be holding 1,500 safely and with so much uncertainty in the market at this time Barrick Gold is a stock I would differently be looking at.
What’s Next For Barrick Gold Stock?
The price of gold and additional asset sales have created a strong opportunity for Barrick in the near term. In an interview, CEO Mark Bristow expressed that the best may still be yet to come. The second-largest gold producer on the planet “will exceed its two-year goal of selling $1.5 billion in assets by 2020.” That’s according to Bristow himself who explained that “My issue is, what does our company look like in 10 years’ time?”
As of now, the company has about $450 million left to sell in order to hit its initial $1.5 billion mark. While rumors continue to cycle about a possible merger with Freeport McMoRan (FCX Stock Report), the company remains focused on long-term growth. “If you’re going to be a major player, you need to have copper in your portfolio,” Bristow said in his interview.
The company’s higher cash flows have allowed the company the luxury of increasing its dividend as discussed. Furthermore, as the company managed to beat analyst estimates, it has set its sights on the next few moves ahead. The company, along with Teranga Gold have obtained approvals from the Government of Senegal to close the acquisition of the 90% interest of the Massawa Gold project. The remaining 10% goes to the Senegal Government.
Barrick’s New Frontier: Japan
Reports began cycling through this week on a deal for Barrick to get involved in mining in Japan. Specifically, Japan Gold reported that it formed a country-wide alliance with Barrick. The companies plan to jointly explore, develop and mine properties in Japan.
The partnership spans 28 out of the firm’s 30 current projects. Barrick will solely fund a two-year evaluation of each project. This could potentially be a three-year, second phase if certain criteria are met. “We are pleased to partner with Japan Gold, who have assembled an impressive portfolio of exploration tenements within the renowned epithermal gold provinces of Japan,” Barrick’s CEO, Mark Bristow, commented. “We look forward to advancing our partnership by combining Barrick’s technical and financial resources with Japan Gold’s first mover advantage, to deliver new world-class gold discoveries.
According to an announcement from Japan Gold, 11 million ounces of gold have been produced from low-sulfidation epithermal deposits within the province. The company’s Chairman and CEO, John Proust stated, “Every great new frontier starts with geology. Japan is an ideal, underexplored, setting to make new large low sulphidation epithermal gold discoveries.”
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