Barrick Gold: Strong Earnings Face Strategic Headwinds

Barrick Mining CA0679011084

Barrick Gold Corporation continues to ride the wave of a robust gold market, yet its strategic initiative to spin off its North American assets is encountering friction with joint venture partner Newmont. This tension emerges alongside a quarterly earnings report that provides substantial fuel for bullish sentiment. However, a downward revision to its 2026 production forecast raises questions about the sustainability of its current momentum.

The mining giant reported fourth-quarter earnings that surpassed analyst projections. Adjusted earnings per share reached $1.04, comfortably exceeding the consensus estimate of $0.85. Revenue saw a significant year-over-year increase to $5.98 billion, against expectations of $5.15 billion.

A major catalyst for investor optimism is a revised capital returns framework. The company announced a new dividend policy that will target a payout of 50% of its free cash flow. This commitment triggered an immediate 140% increase in the quarterly dividend to $0.42 per share. The payment will be distributed on March 16, with a record date of February 27.

Operational performance was equally robust, with the quarter generating a record operating cash flow of $2.73 billion. Notably, copper contributed approximately 30% to the company's EBITDA, highlighting its growing importance to Barrick's portfolio.

Strategic Spinoff Meets Partner Resistance

Barrick's plan to pursue a separate public listing for its North American gold assets is facing public criticism from Newmont Corporation. The two companies are partners in the Nevada Gold Mines joint venture, which is operated by Barrick and owned 61.5% by Barrick and 38.5% by Newmont. Newmont has publicly questioned the operational performance of the venture.

According to Reuters, analysts value the proposed North American package at around $42 billion. Mark Hill, appointed CEO of the new unit in early February, indicated plans to sell a 10% to 15% stake in the entity through an initial public offering. The company aims to complete the transaction by the end of 2026.

Revised Guidance Tempers Long-Term Outlook

Despite the powerful quarterly results, the company's forward-looking guidance introduces a note of caution. For 2026, Barrick anticipates gold production in a range of 2.90 to 3.25 million ounces. This represents a decrease from the 3.26 million ounces projected for 2025.

Furthermore, the company forecasts higher all-in sustaining costs (AISC) between $1,760 and $1,950 per ounce, based on a long-term gold price assumption of $4,500 per ounce. This cost pressure brings operational execution and the success of the North American separation plan into sharper focus, particularly as the gold price environment remains favorable. In February, gold hit record highs, with reports indicating it briefly traded above $4,900 per ounce.