This past week, BMO Capital Markets came out with a note on Barrick Gold’s (TSX: ABX) (NYSE: GOLD) investor day that took place last Friday. Jackie Przybylowski reiterated her outperform rating and US$34.50 12-month price target.
Upon the reiteration, she stated that the key theme on Friday was, “that the company is moving back to basics through improving orebody knowledge, and a better understanding of these fundamentals is the key to optimizing value,” which includes, “long-term exploration for low-cost accretive value creation as well as mineral resource management for near term asset optimization.” She notes that these potential upsides aren’t included in their estimates.
The first highlight is that Barrick is “setting a clear strategy,” as on Friday, the company announced that it has identified, “important gaps in the knowledge base of legacy Barrick assets,” which hopefully will be resolved through exploration and resource management. She says, “The decentralized strategy creates accountability at the mine level and has served Barrick well during the period of travel restriction.”
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Barrick Gold’s Catherine Raw, COO, highlighted that years 2021 and 2022 will be, “years of investment, including the rephasing of Long Canyon, conversion of the Carlin autoclave to CIL,” alongside verifying models and the completion of the third shaft at Turquoise Ridge. Przybylowski comments on this by stating, “We expect that improvements at the joint venture will add significant value to both partners beyond what is currently reflected in guidance.”
She adds that Donlin, which Barrick owns 50% of, is a long turn opportunity, and that their Hemlo operations, which outperformed its third-quarter numbers, is almost a tier two mine.
Przybylowski says that she is watching, “for forward momentum in 2021,” as the CEO Mark Bristow, “has made very necessary improvements to the company’s approach to operations and development, and we fully support the time taken.” She expects the company to “present major deliverables at the next biennial investor day in 2022,” as well as outperform in the execution phase during 2021.
You can see Przybylowski’s estimate changes for Barrick Gold below.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
