Tue, Feb. 24, 6:42 AM
- Workers at Barrick Gold's (NYSE:ABX) Lumwana copper mine in Zambia called off their strike this morning after the government said they would not lose their jobs.
- More than 2,000 workers went on strike yesterday to protest the company's plans to suspend operations due to higher royalties.
- Previously: Barrick Gold hit with 2,000 worker strike (Feb. 23 2015)
Mon, Feb. 23, 11:59 AM
- Barrick Gold (ABX -1.1%) believes it can keep production above 6M oz./year through 2017, and J.P. Morgan's John Bridges agrees; but after that, the analyst expects production to plummet to ~4.5M oz. by 2020 and even lower a few years later.
- Bridges says it has "become apparent recently that the upper limit of sustainable gold production is around the [3M-4M oz.] level assuming [ABX] is skilled at acquiring new projects in a way that makes them accretive."
- The analyst is encouraged by chairman John Thornton’s plan to turn ABX around, but he sees it as a first step only; he has a Neutral rating on the stock and a $13 price target.
Mon, Feb. 23, 10:35 AM
- Barrick Gold (ABX +0.8%) reportedly is working with Credit Suisse on the possible sale of gold mines in Australia and Papua New Guinea.
- ABX said last week it plans to reduce net debt by at least $3B this year, partly by selling the Cowal mine in Australia’s New South Wales state and the Porgera operation in Papua New Guinea, as well as cutting staff at its head office.
- ABX could raise as much as $1.1B from selling the assets, TD Securities said last week, and added that it also could consider selling its 64% holding in Acacia Mining, formerly known as African Barrick Gold.
Mon, Feb. 23, 7:16 AM
- Over 2,000 union workers at the Lumwana copper mine owned by Barrick Gold (NYSE:ABX) downed tools on Monday demanding an explanation of their fate when the company closes the operation.
- "They are demanding to know their future when the mine is closed," said Amos Malupenga, the top civil servant in North-Western province.
- ABX -1.1% premarket
Thu, Feb. 19, 5:49 PM
- In his first earnings conference call, Barrick Gold (NYSE:ABX) CEO John Thornton forcefully described a new strategy for ABX while offering some withering criticism of the company’s actions in recent years.
- Thornton said ABX would focus on gold from now on, contradicting his previous opinion that the company should be a leader in "a range of minerals," and he vowed to focus on projects that can deliver a return on invested capital of at least 15% while deferring, canceling or selling projects that don’t meet that hurdle.
- The focus on gold is a positive for many investors, who buy ABX for gold exposure and were unhappy with the miner’s move into copper; ABX’s copper production is set to shrink significantly as it begins shutting down the Lumwana mine in Zambia next month.
- Co-president Kelvin Dushnisky did not rule out another equity issue, but after issuing $2.9B of stock in late 2013, he indicated that another equity offering would be tough for investors to swallow.
Thu, Feb. 19, 11:44 AM
- Barrick Gold (ABX +5.2%) is sharply higher following its Q4 earnings beat, but Wall Street analysts are not as constructive on the miner’s future.
- Morgan Stanley notes the EPS beat was based on a tax recovery and that ABX’s costs were higher than expectations; it also expects ABX's plan to reduce $3B in debt would require "considerable actions” by the company, and says it is less confident that ABX's in-line guidance can be accurately forecast now.
- Deutsche Bank analysts also are skeptical of the debt reduction plan: “Given limited appetite for gold equities, a $3bn de-leveraging goal mostly via asset sales in accretive manner is easier said than done.”
Thu, Feb. 19, 4:06 AM
- Despite a net loss of $2.85B due to an after-tax impairment charge, Barrick (NYSE:ABX) reported better-than-expected adjusted earnings of $174M, or $0.15 a share.
- Looking forward, the world's biggest gold producer said it would reduce net debt by at least $3B by year-end through asset sales, lower administration costs and a decentralized operating model.
- Barrick also expects to produce 6.2M-6.6M ounces of gold in 2015 at all-in sustaining costs of $860-$895 per ounce vs. 6.25M ounces of gold at $864 per ounce in 2014.
- ABX +1% AH
- Q4 results
Wed, Feb. 18, 10:25 PM
Wed, Feb. 18, 2:15 PM
Tue, Feb. 17, 5:35 PM
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Fri, Feb. 13, 3:57 PM
- Walter Investment (WAC +14.6%) rallies ~15% higher after a favorable report in Barron's cited managers of the GoodHaven mutual fund who said WAC is a stock that has fallen by more than half over the past two years but can rebound quickly.
- WMC achieves better repayment results with fewer borrower complaints than most banks, the managers say, adding that the mortgage servicer has $3-$4/share in long-term earnings power and easily could hit $30-$35.
- The article also highlighted Barrick Gold (ABX +0.2%) and WPX Energy (WPX -0.4%) as stocks that could jump quickly if the prices of their respective commodities make progress.
Mon, Feb. 9, 6:24 PM
- As North American senior gold producers prepare to report year-end earnings, Citigroup is upbeat on the group even as it predicts gold prices will fall in 2015 to $1,239/oz. before climbing back somewhat in 2016 and 2017, as the firm believes reductions in operating and capital spending should position most to generate positive free cash.
- Weaker forex should drive down cash cost guidance, Citi says, estimating that Newmont Mining (NYSE:NEM) will benefit the most with their Australian dollar exposure only 18% hedged and pushing costs down by ~$24/oz.; Kinross Gold (NYSE:KGC) follows with $20/oz. savings from the ruble.
- On the diesel fuel side, Citi thinks benefits seem evenly matched at $11-$13/oz. for Barrick Gold (NYSE:ABX), NEM and KGC.
Wed, Feb. 4, 11:21 AM
- Zambia's newly elected president has directed the government to expedite talks with miners and promptly resolve the impasse over the new mining tax regime to ensure the smooth running of the mining industry.
- In January, the country began implementing a new tax regime, requiring open-pit mines to pay as much as a 20% royalty on their revenue, up from 6%, while underground mines would pay an 8% royalty, up from 6%.
- The plan prompted Barrick Gold (ABX +1.2%) to announce it would suspend operations at its Lumwana copper mine, which supports nearly 4K direct jobs in the area, and other miners such as Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and First Quantum Minerals (OTCPK:FQVLF) to shelve expansion projects.
Wed, Jan. 14, 6:25 PM
- Goldcorp (NYSE:GG) could soon join a group of large gold miners that have a net loss to show for their entire history as corporate entities, Financial Post's Peter Koven writes.
- GG warned this week that it expects to record a $2.3B-$2.7B impairment charge on its Cerro Negro mine in Argentina; since the miner’s retained earnings were $2.2B as of Sept. 30, they may be completely wiped out in its next quarterly report.
- That's not unusual in the gold industry, where writedowns have destroyed historic profits in recent years: Barrick Gold (NYSE:ABX) has retained earnings of -$7.8B, Kinross Gold (NYSE:KGC) has -$8.5B in historic losses, AngloGold Ashanti (NYSE:AU) has -$4B, and Agnico Eagle Mines (NYSE:AEM) has a mere -$740M.
- The writedowns are non-cash and have no impact on day-to-day operations, but they have damaged the reputations of gold miners and drove away investors who have proven tough to woo back, Koven writes.
Fri, Jan. 9, 10:41 AM
- Nearly every sell-side analyst calls Barrick Gold (ABX +1.5%) a Buy or a Hold after shares have lost ~40% in the past six months, but Macquarie downgrades the stock to Underperform with an $11 price target, saying ABX has limited options to repair its balance sheet and needs more time to regain investor confidence.
- ABX already has taken $14.2B in various writedowns, and the firm foresees another ~$2.5B impairment charge on the Lumwana mine in its Q4 results, but writedowns are old news and already baked into the stock price; a bigger concern, Macquarie says, is how ABX will improve its shrinking production profile and troubled balance sheet down the road.
- ABX is looking to boost output at its Goldstrike operation in Nevada by using a new commercial process to extract gold using calcium thiosulphate instead of cyanide, but Macquarie considers the process very complex and risky, and doubts ABX will reach its production targets anytime soon.
- Earlier: Barrick Gold downgraded at RBC following recent bump
Thu, Jan. 8, 11:36 AM
- Barrick Gold (ABX +1.1%) is downgraded to Sector Perform from Outperform with a $14 price target, down from $17, at RBC after rising more than 5% YTD, citing uncertainty about the miner’s debt and capital allocation.
- RBC notes that ABX’s debt-to-total-capital ratio is 45%, so its financial leverage is higher than average, and points to market concerns about how ABX will fund future capital and repay debt.
- The firm believes ABX needs to generate excess cash to reduce its ~$13B in long-term debt through the sale of non-core assets or from free cash flow, as well as create operating joint ventures for its copper and gold mines, or negotiate strategic financing agreements.
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