Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
Barrick’s ABX first-quarter 2025 adjusted NPAT of about USD 600 million, or USD 0.35 per share, is an 81% increase on a year ago. Like many other gold miners, 40% higher prices of USD 2,900 per ounce are the main driver, partially offset by 17% lower volumes and higher unit cash costs.
Why it matters: The result is broadly as expected. Negotiations with Mali over the tax and economic arrangements governing its Loulo-Gounkoto operations continue. We still assume production restarts in coming months and the mine contributes around 250,000 ounces in 2025.
· Even if its restart is delayed, strong first-quarter production of 750,000 ounces (at the top end of guidance) and growing volumes elsewhere as 2025 progresses will likely mostly offset. We expect 2025 volumes of 3.5 million, at the top end of guidance excluding Loulo-Gounkoto.
· First quarter all-in sustaining costs including by-product credits, or AISC, of USD 1,780 per ounce are above full-year guidance of between USD 1,460 and USD 1,560. However, higher volumes over the remainder of the year should see AISC fall to around our USD 1,630 estimate.
Key Morningstar Metrics for Barrick Mining
The bottom line: We raise our fair value estimate for no-moat Barrick by 2% to USD 24.00 per share, driven by its agreement to sell the half stake in the Donlin development project for around USD 1 billion. We previously ascribed little value to this project.
· Shares are trading 19% below fair value despite spot gold being near historical highs, partly due to uncertainty over the status of Loulo-Gounkoto. Another likely reason is that costs remain too high, but this is temporary in our view.
· We forecast volumes to rise to about 4.5 million ounces from 2029. This is driven by Loulo-Gounkoto restarting and higher volumes at its Nevada Gold Mines and Pueblo Viejo joint ventures with Newmont. All things equal, this likely lowers unit cash costs and improves margins.
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