Barrick Gold Corp (NYSE: GOLD), the global gold mining leader headquartered in Canada, announced in its pre-market earnings report on Monday that it has reached a significant agreement with rival Newmont Corp regarding their major joint venture in Nevada, USA. This deal clears the path for the Canadian company to accelerate its initial public offering (IPO) of North American mining assets on the New York Stock Exchange. Under the terms announced Monday, Newmont will pay Barrick $1.95 billion, while both companies will contribute assets previously excluded from the joint venture, including Barrick's Fourmile project and Newmont's Fiberline and Mike gold development projects. The company's second-quarter results underscored high profitability and production delivery despite a sequential decline in gold prices. Meanwhile, Barrick repurchased approximately $1.209 billion in shares and declared a quarterly dividend of $0.175 per share, delivering total shareholder returns of about $1.5 billion for the quarter, a 242% increase year-over-year. This signals management's view that the company's assets remain significantly undervalued. More importantly, Barrick maintained its full-year gold production guidance of 2.9 to 3.25 million ounces and its critical All-In Sustaining Cost (AISC) guidance of $1,760 to $1,950 per ounce, while lowering its full-year attributable capital expenditure forecast from $4.0 to $4.45 billion to $3.8 to $4.2 billion. AISC, or All-In Sustaining Cost, represents the comprehensive unit cost required to maintain a mine's existing production capacity, typically including cash operating costs, sustaining capital expenditures, administrative expenses, mine-site exploration, royalties, and reclamation costs. It is a core metric for measuring how much Barrick truly spends per ounce of gold produced. The wider the gap between gold prices and AISC, the stronger the mine's profit elasticity typically becomes.
Barrick Gold is actively pursuing an IPO of its North American assets as the world's third-largest gold producer. The company aims to rejuvenate itself after a series of operational setbacks and management changes, including the abrupt departure of long-time CEO Mark Bristow last September. Barrick has also lagged behind competitors like Newmont and Agnico Eagle Mines Ltd. during 2025, seemingly failing to fully capitalize on the record-breaking rally in gold prices. Media reports in February indicated that Newmont wanted Barrick to address what it considered underperformance of the Nevada assets before proceeding with the IPO. Earlier this year, Newmont issued a default notice to Barrick after finding evidence of mismanagement in the Nevada joint venture. To resolve their differences, Barrick on Monday announced the appointment of Mark Hill as CEO of its proposed North American business. Despite opposition from some major shareholders who are reluctant to dilute their exposure to Barrick's most valuable assets, the company is pushing ahead with its plan to complete the IPO by the end of this year. Barrick Chairman John Thornton stated that the IPO would allow investors to fully unlock the value of the North American assets. However, the plan faces opposition from some key shareholders, including Van Eck Associates Corp, Mackenzie Financial Corp, and Franklin Equity Group, according to prior media reports. On the earnings front, Barrick reported second-quarter adjusted earnings per share of $0.82, in line with Wall Street analysts' median estimate. Gold production rose 11% to 796,000 ounces during the quarter, beating market consensus. The company reaffirmed its full-year production guidance of approximately 2.9 to 3.25 million ounces of gold and 190,000 to 220,000 tonnes of copper. Following the IPO announcement and quarterly results, Barrick's shares fell as much as 6.1% in pre-market trading in New York on Monday.
Despite a significant decline in gold prices during the second quarter and first half of the year, Barrick's operations maintained high profitability and steady production. Second-quarter revenue reached $5.292 billion, a 44% increase year-over-year. Net profit surged 50% to $1.217 billion, with adjusted net profit up 70% to $1.363 billion. Attributable adjusted EBITDA hit $2.545 billion, a 51% increase, while the profit margin remained high at 60%. Gold production reached 796,000 ounces, an 11% increase from the first quarter and above the company's quarterly guidance range of 730,000 to 770,000 ounces. Gold sales volume was 801,000 ounces, up 4% year-over-year. Notably, Barrick's realized gold price in the second quarter was $4,417 per ounce, down 8% sequentially, while AISC rose to $1,866 per ounce, a 9% sequential increase and an 11% year-over-year increase. This indicates that the company achieved significant year-over-year profit growth despite the dual pressures of lower selling prices and rising costs from fuel, grades, and royalties, proving that the current profit base is far higher than in the previous gold cycle. Operating cash flow was $1.704 billion, up 28% year-over-year. The company ended the period with $5.927 billion in cash and $4.682 billion in debt, maintaining a net cash position of approximately $1.245 billion and a solid balance sheet. However, the second-quarter results also clearly exposed Barrick's biggest fundamental constraint: rising costs are eating into some of the gold price gains, meaning future stock price elasticity depends on whether the speed of gold's recovery can outpace the rise in AISC. Attributable free cash flow for the quarter was only $141 million, down 33% year-over-year and 88% sequentially, primarily due to advanced project capital expenditures, with total capital spending rising to $1.189 billion. Despite this, the company repurchased approximately $1.209 billion in shares and declared a quarterly dividend of $0.175 per share, delivering total shareholder returns of about $1.5 billion for the quarter, a 242% increase year-over-year, signaling management's belief that the assets remain significantly undervalued. More importantly, the company maintained its full-year gold production guidance of 2.9 to 3.25 million ounces and AISC guidance of $1,760 to $1,950 per ounce, while lowering its full-year attributable capital expenditure forecast from $4.0 to $4.45 billion to $3.8 to $4.2 billion. Development of the Fourmile project's underground ramp is set to begin in the third quarter, and the Lumwana expansion is still on track for first copper production by the end of the first quarter of 2028. The agreement with Newmont provides $1.95 billion in cash and expands the Nevada asset portfolio to nearly 100 million ounces, removing the biggest obstacle to the North American asset IPO later this year. Considering the gold price trajectory, Barrick's risk-reward profile in the second half of the year has significantly improved compared to the end of June, but it has not yet returned to the extremely favorable conditions seen in the first quarter. Spot gold fell to around $4,027 per ounce on June 30, marking an 11.2% monthly decline and one of the worst quarterly performances since 2013, mainly due to the US-Iran conflict pushing up inflation and expectations of a Federal Reserve rate hike. As of August 10, spot gold had recovered to approximately $4,345 per ounce, hitting a seven-week high on Friday, an 8% rebound from its late-June low. This recovery was driven by weak US employment data, which significantly cooled expectations for a September rate hike. While gold has escaped the most dangerous "high inflation + high interest rate" double whammy of the end of the second quarter, the current spot gold price remains below Barrick's second-quarter realized price of $4,417 per ounce and the company's full-year assumption of $4,500 per ounce. This highlights that the earnings headwinds are rapidly easing, though the company has not yet re-entered the phase of super-normal profits seen in the first quarter.
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