Barrick Mining Faces a Cost Squeeze as New CEO’s First Earnings Report Looms

Barrick Gold shares slide 12% YTD as rising costs, Pakistan delays, and CEO Mark Hill's first quarterly results loom, despite gold trading near historic highs.

Barrick Mining’s stock has lost roughly 12 percent of its value since the start of the year, even as gold trades near historic highs. The disconnect between the metal’s strength and the company’s share price reflects a growing anxiety among investors ahead of the first quarterly results under new chief executive Mark Hill.

The shares currently trade at C$52.49, some 27 percent below the 52-week high hit in January. That slide has brought the stock close to testing its 200-day moving average of C$52.09, a level traders often view as a critical support line. A recent pullback in the gold price — now around $4,575 an ounce — has added to the bearish sentiment, with rising interest rate concerns weighing on demand for the yellow metal.

Production Costs Climb Sharply

When Barrick reports first-quarter numbers on May 11, the headline figure investors will be watching is the all-in sustaining cost. Management now expects AISC to land between $1,760 and $1,950 per ounce this year, a significant jump from the $1,637 recorded in 2024. Lower ore grades and more expensive consumables are driving the increase, while the ramp-up at the Loulo-Gounkoto mine in Mali is also weighing on the balance sheet. Barrick regained control of that operation in December and is now pouring capital into its expansion.

The first quarter is traditionally the weakest period for both gold and copper production, and the company has warned that output will be subdued. Planned maintenance work is expected to wrap up in the second half of the year, when projects such as Goldrush in Nevada should start delivering higher volumes.

Pakistan Project Hits the Brakes

Beyond the immediate cost pressures, Barrick’s long-term growth pipeline is facing delays. The Reko Diq copper-gold project in Pakistan has been slowed by local security concerns, with a review now expected to stretch until mid-2027. The original budget for the first phase stood at roughly $6 billion, with a second phase penciled in at an additional $3.5 billion. Analysts now expect those figures to rise substantially.

The company’s strong balance sheet provides some cushion. Barrick generated free cash flow of nearly $4 billion last year, and that financial firepower is being redirected toward shareholders under a new capital allocation strategy.

Dividend Shift and Spin-Off Plans

Barrick has scrapped its annual share buyback program in favor of a new dividend policy that will pay out 50 percent of free cash flow to shareholders. The base dividend has been raised to 17.5 US cents per share. The May 11 earnings report will serve as the first real test of whether operating cash flow can sustain those higher payouts while costs rise and the Pakistan project remains on ice.

Meanwhile, CEO Mark Hill is pushing ahead with a corporate restructuring that aims to unlock value. Barrick plans to spin off its North American business via an initial public offering by the end of 2026, with analysts valuing the unit at more than $60 billion. The move is designed to separate the company’s lower-risk North American assets from its more volatile international operations and reverse the stock’s lackluster performance in recent years.

Investors will get their first chance to question Hill directly at the annual general meeting on May 8, three days before the quarterly numbers land. The market is expecting a sharp year-on-year profit jump, but the focus will be on production guidance. Barrick has posted six consecutive quarterly output declines, hitting a historic low, and is targeting up to 3.25 million ounces of gold this year. Whether the new CEO can reverse that trend while managing rising costs will determine the stock’s direction in the months ahead.