Barrick Gold Corp. has surged to become Canada’s best-performing stock as a two-month rally in the precious metal gives added lift to the company’s turnaround efforts.
Barrick’s shares are up 29 per cent this year in Toronto, making it the best-performing stock on the Standard & Poor’s/TSX Composite Index. It’s also overtaken its two biggest competitors, Goldcorp Inc. and Newmont Mining Corp., in market capitalization, allowing it to reclaim the title of the world’s most valuable gold company.
“Guys like me, on the street, we had given Goldcorp the crown in the senior sector,” Barry Allan, an analyst with Mackie Research Capital Corp., said by phone from Toronto. “And Barrick actually pulled some rabbits out of a hat. Not enough to get them to nirvana but they were seriously making some hard moves and some hard calls.”
In the last year, those hard calls have included more than US$3-billion worth of asset sales and joint ventures as well as aggressive cost cuts. That helped the company achieve its target of cutting its US$13.1-billion debt by $3 billion in 2015. Longer term, the goal is to pare operations back to roughly a half-dozen core mines in the Americas that can withstand much lower gold prices than those seen today.
Allan says expectations were high for Goldcorp and low for Barrick when he took a long look at Barrick’s stock in August.
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