Canadian gold miner Barrick Gold (TSE:ABX) discovered, to its alarm, that the Mali government is likely planning to start mining its own gold from now on. This was made evident when said government started seizing gold stockpiled at the Barrick Gold facilities in the country. Investors were not pleased, and sent shares down over 1.5% in Monday morning’s trading.
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The Malian government is going back to the Loulo-Gounkoto site, and has begun—noted a report from Reuters—”seiz(ing) gold stock” at the site. This led to Barrick once again issuing a warning that it may have to suspend operations at that site, which makes sense, as Barrick would like to, you know, keep some of the gold that it mined in the country.
The report noted that the Malian government wants a bigger share of the gold mined, though no one noting as yet just how much of the gold the Malian government is carting off. The report also noted that there is currently around four metric tons located at the site, valued at around $380 million. The Malian government did not respond to word of Barrick’s plans to shut down the site. However, Barrick may have trouble elsewhere, as the report noted the Niger and Burkina Faso sites are also looking to “renegotiate” terms.
A Minor Hiccup?
Yet despite the fact that several mines in Africa could be at risk, there seems to be little concern from investors, as evidenced by today’s share movement. Analysts do not seem concerned either; two separate reports point to Barrick Gold as a good idea going forward, despite the African challenges.
One report noted that Barrick Gold was currently “…attractively priced…” and offered “…a strong balance sheet and substantial gold and copper reserves.” That combination is particularly effective; gold is a hedge against bad times, while copper takes advantage of positive developments. A second called attention to Barrick Gold’s diversified operations; losing the African trade would be painful, but hardly crippling, as much more stable operations throughout North America and beyond are in play.
Is Barrick Gold a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:ABX stock based on eight Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 3.24% loss in its share price over the past year, the average TSE:ABX price target of C$33.85 per share implies 51.59% upside potential.
