Barrick Gold Q4 Earnings Report Analysis & BIG News From Newmont | Gold Mining Highlights

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Recently, Barrick Gold released its Q4 and Full Year report, so I want to talk about a few highlights, and I also want to discuss some very interesting news from the gold mining industry that can really change the market.

Looking into the report, we see that the production and all-in sustaining cost for gold were better in Q4 compared to Q3. This was not the case for copper however, as there was a high increase in the cost of production due to higher capital expenditures, and the whole year was of course affected by inflation for both metals, especially by the higher energy prices.

The net earnings and free cash flow were negative during the quarter, but when you adjust them they are not terrible, and in fact the adjusted EPS was 8% higher than expected. They tend to do this kind of accounting adjustment in Q4 based on how much they produced – the more you produce, the higher the depreciation of the assets.

My thesis behind Barrick Gold remains the same: the company should do ok when gold prices are low, very well with gold above $2,000, and it should offer a potential 10x if we see gold prices shoot up. Meanwhile, the dividend can also be very attractive if I buy at a good price, with yields that can even be in the double-digit area.

They barely have any debt and they produce gold at around $1,250 per ounce, so anything above that is a profit.

In my opinion, this is an ideal way to get exposure to gold with leverage and also a nice dividend. They also come with a bit of a hedge thanks to the copper production, which has a lot of potential in the future, as I talked about in this video.

Other news I wanna talk about is Newmont bidding almost $17 billion for Newcrest.

Newmont is currently the biggest producer of gold on the planet, with a production of around 6 million gold ounces per year.

Newcrest, on the other hand, is an Australian gold miner that can produce a bit over 2 million ounces of gold and a bit of copper, and make a free cash flow of around $1 billion per year in good times. They are pretty much a third of Newmont when it comes to these numbers, and they have a relatively small all-in sustaining cost of less than $1,150 per ounce.

Around the same time, Barrick bought Randgold, but again, the price of gold was like $1,300 per ounce back then, not almost $2,000.

What’s interesting is that if the deal goes through, Barrick and other companies may also have to look into some acquisitions. In the long-term, it won’t be such a bad thing if they overpay by 20-30%, but I would rather see them develop when the prices are low.

My only issue with buying at this price is that they may end up overvaluing the company and paying too much for it. $2 or $3 extra billion may not look like that much in this case, but that money could’ve been used for something like explorations, share buybacks or paying a nice dividend. At the current price, $3 billion would’ve been a 7% to 8% dividend for Newmont.

But, we also have to remember that the lower the competition, the better it is for the companies and the price of gold. When you and 2 or 3 other companies make the price, you can easily control the market. This can be very positive for the price of gold, and it’s definitely something to follow.

Other videos:
Vale Stock Analysis – https://youtu.be/9lF8RE7QbVQ
Barrick Gold Stock Analysis – https://youtu.be/ghCZw1iBXvM
Newmont Mining Stock Analysis – https://youtu.be/cHPWUZL7o5M
Verizon Stock Analysis – https://youtu.be/gqapzyhuMdk
Stellantis Stock Analysis – https://youtu.be/CUIYGAsro0I

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On my channel, you will find a wide variety of stock analyses – from gold miners such as Barrick Gold (NYSE: GOLD) and Newmont Mining (NYSE: NEM) to tech stocks like Alphabet (NYSE: GOOG/GOOGL), Apple (NYSE: AAPL), Intel (NYSE: INTC) and even other commodity producers such as Vale (NYSE: VALE) and Rio Tinto (NYSE: RIO).

Although I mostly focus on value investing, there will also be plenty of high-yield dividend stocks being analysed on the channel, especially if I believe that there is value in there.

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DISCLAIMER: I am not a financial advisor and nothing on this channel should qualify as investing advice. All information is provided for your education or entertainment. It is not intended to be investment advice. This information is general in nature and has not taken into account your personal financial position or objectives. Seek a duly licensed professional for investment advice.

0:00 Barrick Gold Earnings Report Review
2:55 Newmont Tries to Buy Newcrest Mining

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