Yorkville Investor
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Barrick Royalty Spin-Off: Unlocking Shareholder Value Through Financial Engineering

Barrick Gold Royalty Spin-Off: Unlocking Shareholder Value through Financial Engineering

"Financial engineering" is a term, which has developed some pejorative connotations. It suggests a triumph of artifice over substance; salesmanship over value.

But what of a situation where a company consistently trades below its potential? A situation where the value appears self-evident on the basis of cash flow metrics but where factors -both macro and internal- ostensibly coalesce to ensure a perpetual discount?

We propose that Barrick Gold (NYSE:ABX) be split into two companies:

  1. A royalty company (comprised of royalties strictly on Barrick's own operating mines)
  2. An operating company (essentially Barrick, but burdened by the royalties from the royalty company)

Existing shareholders would receive one share of the...

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