So while the news from Canadian gold stock Barrick Gold (TSE:ABX) has not been that great in recent days, especially with the whole Mali thing, Barrick still managed to put up an impressive earnings report win. And shareholders rose up as one to applaud their champion, sending shares up nearly 6.5% in Wednesday morning’s trading.
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The good news for Barrick Gold was that gold prices in general were on the rise, which gave it a significant boost to its operations. That allowed Barrick Gold to post adjusted earnings of $0.46 per share, which was nicely above the LSEG consensus estimates of $0.41.
And Barrick Gold’s total production was down as well. The originally projected four million ounce goal was not met, reports noted, which was mostly due not to the Malian government taking gold outright, but rather to a rocky start getting the Pueblo Viejo mine in the Dominican Republic up and running. But with average gold prices up from $1,986 per ounce to $2,657 per ounce in the fourth quarter, a lot of issues could be quietly swept aside.
Buybacks and Mali
Meanwhile, Barrick Gold shut down its earlier share buyback program, as that program had repurchased $498 million worth of shares last year. In its place, it brought out a new plan with $1 billion backing it, allowing for an even more expansive share buyback.
As for the Malian mines, talks have not been going well, reports note. In fact, the talks have been shut down altogether, at least for now. Mali wants a settlement payment of 125 billion CFA francs, which represents about $196.7 million U.S. Mali also wants Barrick to comply with new mining code that sets up a larger cut for the government and also cuts out tax exemptions. It sounds, therefore, like Mali will have an unproductive gold mine on its hands for some time to come.
Is Barrick Gold a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:ABX stock based on seven Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 38.66% rally in its share price over the past year, the average TSE:ABX price target of C$31.61 per share implies 21.02% upside potential.
