GOLD Details

Barrick Gold Corporation (NYSE: GOLD) is a Canada-based gold mining company engaged in producing and selling gold and copper and other related activities, such as exploration and mine development. GOLD has mining operations in Argentina, Australia, Canada, Chile, Dominican Republic, Papua New Guinea, Peru, Saudi Arabia, the United States, and Zambia. As of October 05, 2021, the company's market capitalization stood at USD 32.43 billion.

USD 20 Million Earn-In Agreement: On September 22, 2021, Nevada Gold Mines LLC (NGM), a joint venture between GOLD and Newmont Corporation, signed an agreement with Ridgeline Minerals Corp., a gold and silver explorer, under which NGM can acquire an interest in the latter's Swift gold project, a 75 sq. km property package located in Nevada. NGM will acquire an initial 60% operating interest in Swift by investing a minimum of USD 20 million over five years (USD 4 million in guaranteed work expenditure before December 31, 2023, and USD 16 million for work expenditures and preparation of a technical report before December 31, 2026), with the option to increase its interest to a total of 75%. In addition, NGM will reimburse USD 372,763 to Ridgeline in consideration for recent overhead and work costs at Swift within 15 days of signing the formal agreement.

Q2FY21 Results: The company reported a YoY decline of 5.30% in total revenues to USD 2.89 billion in Q2FY21 (ended June 30, 2021) from USD 3.06 billion in Q2FY20 due to a decrease in sales volume. Net income for Q2FY21 increased to USD 694 million vs. USD 622 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents of USD 5.14 billion and total debt of USD 5.15 billion.

Key Risks: The highly volatile and unpredictable prices of gold and copper on the global market significantly impact GOLD's operations. As a result, any unfavorable price movement could harm the company's performance. Furthermore, GOLD is a gold mining corporation regulated by various federal and state laws. As a result, stricter regulations or non-compliance with required laws could harm the company's profitability.

Outlook:

10-Year Production Outlook (Source: Results Presentation, August 09, 2021)

Valuation Methodology: Price/Cash Flow Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

GOLD Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: GOLD's stock price decreased 24.30% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 17.56 to USD 29.23. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 39.87. We have valued the stock using the Price/Cash Flow-based relative valuation methodology and arrived at a target price of USD 22.86. Considering the significant correction in the stock price, decent balance sheet, current valuation, and associated risks, we recommend a "Buy" rating on the stock at the closing price of USD 18.15, down 0.44% as of October 05, 2021.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.