By Robb M. Stewart
Barrick Mining will spin off its North American gold assets into a new publicly listed company in an effort to boost value at a time when prices for the precious metal have soared.
The miner's board gave management the go ahead to pursue an initial public offering of its prized gold operations by the end of the year, part of a reset for Barrick after it suddenly parted ways with former boss Mark Bristow last year.
Mark Hill, a company veteran who has been running Barrick since Bristow left, has been appointed chief executive and president permanently and is tasked with leading the IPO process.
Details of just how the division will work have yet to be decided, through the Toronto-based miner said it plans to retain a significant controlling interest in the North American gold assets, which accounted for a little more than 60% of the 3.26 million troy ounces produced last year. Questions remain about who will lead the new company, where it will be headquartered and what it means for Newmont, which holds sizable stakes in Barrick's core operations in the region.
Hill indicated to investors on a conference call that an IPO was likely to include a 10% to 15% share of Barrick's interest in the assets. "We're starting a nine-month process," he said.
The new company that will be floated will house Nevada Gold Mining, its wholly-owned Fourmile discovery in Nevada, and the Pueblo Viejo mine in Dominican Republic. Newmont has a 38.5% interest in the Nevada operation, which is covered by a venture agreement that includes disclosure requirements and preferential purchase rights, and a 40% stake in Pueblo Viejo.
Like other precious metals miners, Barrick has seen its shares rise sharply over the past year as prices for gold and other metals have jumped, but analysts say its valuation has lagged that of its peers. Activist investor Elliott Management has built up a shareholding in Barrick and has pushed for a breakup of the North American business from riskier assets in other parts of the world.
Still, the jump in gold and copper prices has buoyed Barrick's cash flows, driving a jump in earnings in the latest quarter and prompting its board to boost shareholder returns, with new plans to increase the dividend 40%.
Outgoing Chief Financial Officer Graham Shuttleworth, who is set to be succeeded by director Helen Cai in March, said Barrick's board and management team through a number of permutations and did a lot of analysis before concluding a partial spin off the North America assets was the best option to drive an uplift in value.
Barrick currently spans 17 countries and five continents, with some of the world's largest gold mines. Under Bristow's leadership, the miner had shed smaller operations with short lives while also increasing its focus on copper, with operations in Chile, Saudi Arabia and Zambia.
The company has struggled in some parts of the world. Shortly after Hill was named interim CEO, Barrick struck a deal to settle a bitter dispute with Mali's military government to regain control of assets and for four detained employees to be released. The temporary closure in Mali ate into gold output last year. Barrick said it has now launched a review of all aspects of Reko Diq in Pakistan's Balochistan province, one of the world's largest undeveloped copper and gold projects, after an increase in security risks on the ground.
Following the sale of assets, including its last producing mine in Canada last year, Barrick expects to produce 2.9 million to 3.25 million ounces of gold this year, as much as 3.65 million ounces in 2027 and up to 3.75 million the following year. At the same time, copper output is projected to come in at between 190,000 and 220,000 metric tons this year, after rising 13% in 2025 to 220,000.
With increased sales and higher prices, Barrick's fourth-quarter net earnings climbed to $2.41 billion, or $1.43 cents a share, from $996 million, or 57 cents, a year earlier. On an adjusted basis that strips out items including certain one-time costs, earnings more than doubled to $1.04 a share, beating the 90 cents forecast of analysts polled by FactSet.
Revenue for the quarter jumped 64% to $6 billion, topping the $5.2 billion expected by analysts.
After raising the base dividend 25% in November, Barrick said it will now pay a quarterly dividend of 42 cents a share. That is more than double the 17.5 cents paid out the quarter before, which included a performance dividend.
From the fourth quarter, the company said its policy will be to target a total payout of 50% of attributable free cash flow on an annualized basis. That will comprise a fixed base quarterly payout of 17.5 cents a share, and a performance top-up at the end of each year based on cash flow during the year.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
02-05-26 1326ET
