Strategic Clash Threatens Barrick’s North American IPO Ambitions

Barrick Mining CA0679011084

Plans by Barrick Gold to launch a public listing for its North American operations have hit a significant roadblock, with joint venture partner Newmont publicly demanding operational improvements. The world's largest gold producer is leveraging its position as the minority partner in the "Nevada Gold Mines" venture to apply pressure on the Canadian miner ahead of a potential spin-off.

In a sharply worded statement released Tuesday, Newmont laid down a clear condition: Barrick must address operational deficiencies before proceeding with an Initial Public Offering (IPO). Newmont contends that the joint venture, which is 61.5% owned and operationally managed by Barrick, has suffered a decline in both value and performance over the past six years. The timing of this critique is particularly sensitive, as the assets in question are slated to form the core of a new entity valued at over $60 billion.

This public disagreement throws a spotlight on the strategic tensions between the two mining giants. Analysts suggest Newmont, which holds a right of first refusal on the assets, may be positioning itself for a full acquisition of Barrick's stake rather than supporting a separate market listing. The criticism of operational management strengthens Newmont's hand in any forthcoming negotiations.

Operational Data Fuels the Dispute

Recent performance figures appear to lend weight to Newmont's concerns. During the fourth quarter of 2025, gold production at Nevada Gold Mines plummeted by 23%. Concurrently, cost pressures are mounting, with forecasts indicating all-in sustaining costs are expected to rise by approximately 20% for gold and around 10% for copper compared to the prior year.

Martin Pradier of Veritas Investment Research described these results as unexpected. His team has adopted a more cautious view on Barrick, noting that the cost structure is proving significantly less favorable than the company had previously indicated.

Strong Overall Results Amid Sectoral Weakness

Despite the operational headwinds in Nevada, Barrick's broader corporate performance told a different story. The company posted robust quarterly results, generating a free cash flow of $1.62 billion and record fourth-quarter earnings. This financial strength allowed the board to raise the dividend to $0.42 per share—a 140% increase from the previous quarter. Additionally, Barrick executed a $500 million share buyback.

The conflicting signals have divided market experts. UBS reduced its price target on Barrick shares, citing the emerging risks. In contrast, CIBC raised its target substantially, pointing to extremely optimistic gold price forecasts of up to $6,000 per ounce for the current year.

An Uncertain Path Forward

Barrick's original strategy involved floating a 10% to 15% minority stake in the new North American unit, while retaining higher-risk assets in Africa and Pakistan within the parent company. The current impasse casts doubt on this timeline and structure.

For investors, the situation presents a dilemma. The company's solid financial base and generous shareholder returns demonstrate underlying strength. However, the very public dispute over its cornerstone Nevada operations clouds the investment thesis centered on the IPO's potential value unlock. The market now watches to see whether Barrick can satisfactorily address its partner's grievances or if Newmont will use its leverage to seize greater control over the prized North American mines.

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