Fine tuning Barrick – by Kip Keen ( – August 20, 2015)

A subtle shift in analyst perspective on the gold producer.

Broadly of course, Barrick’s stock has been pummeled by the bearish gold market that relatively speaking, tends to punish, and conversely reward, miners far more than the yo-yo-ing gold price. But more specifically, Barrick has also been punished, harder than some, for its past failings in acquisitions, strategies and appetite for debt.

This has made for one of those perversions of the market, at least in very simplistic terms, where in recent years Goldcorp, more the market darling, has exceeded Barrick by market cap despite Goldcorp doing half the production and the fact Barrick has longer life assets. As it stands, it is C$16.4 billion to C$12 billion Goldcorp market cap versus Barrick.

In evening out that playing field, Barrick’s John Thornton, Executive Chairman, has some ways to go. But he may be starting to make a little headway.

With much fanfare (at least from Barrick) the company outlined its back to the future strategy earlier this year. It’s a story of cuts and tweaking of management to, it’s hoped, increase efficiencies at operations. It’s also a story of mine sales and debt reduction.

The traction on the those goals has been real, whether you agree with the ultimate strategy or not. Barrick is near to its $3 billion target in finding ways – asset sales mostly – to pay down debt by that amount.

To name most. Cowal, $550 million. Half of Porgera for $298 million. Half of Zaldivar for $1 billion. A cut of Pueblo Viejo for $610 million. And plans still to sell non-core stuff.

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