Barrick Gold Corp. has announced it will repurchase as much as US$3 billion of its shares, as the world's third-largest gold producer seeks to attract investors ahead of the planned spinoff of its North American assets later this year. The buyback plan, which would double the amount repurchased last year, comes after a historic rally in gold prices and is part of Chairman John Thornton's strategic reset to prioritize returning capital to shareholders.
Market Reaction and Comparison with Rivals
Shares of Barrick climbed as much as 2.9% in pre-market trading in New York on Monday following the announcement. The buyback also helps Barrick narrow the gap with rival Newmont Corp., which last month announced plans to repurchase US$6 billion of shares after reporting a record profit in the first quarter. Newmont's shares have gained nearly 17% this year, while Barrick's have declined by 1%.
First-Quarter Performance and Guidance
Barrick reported first-quarter profit and gold output that exceeded analyst expectations. The company also reaffirmed its full-year guidance of approximately 2.9 million to 3.25 million ounces of gold and 190,000 to 220,000 tonnes of copper.
Planned IPO and Asset Spinoff
Last month, Barrick announced plans to list its North American operations in New York and confirmed it is on track to complete an initial public offering by the end of this year. The spinoff will include Barrick's interests in the Nevada Gold Mines and Dominican Republic joint ventures with Newmont, as well as the Fourmile project in Nevada. This move is part of a broader effort to reposition the company following operational challenges and a leadership shakeup, including the abrupt departure of longtime CEO Mark Bristow in September.
Ongoing Coordination with Newmont
In Monday's statement, Barrick reiterated that it can proceed with the IPO unilaterally, while noting ongoing coordination with Newmont. However, Newmont has urged operational improvements before any separation and issued a notice of default in February, alleging that Barrick redirected resources from the Nevada venture to advance the Fourmile project. Barrick has described Fourmile as one of the century's greatest gold discoveries, with a preliminary assessment indicating potential annual output of up to 750,000 ounces.
