Barrick Mining: IPO Spinoff Dream Hits Royalty Shocker And Margin Squeeze (Archive)
IPO upside dulled by disputes, hidden royalties, rising costs, and richer valuation.
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Elevator Pitch
- Partner disputes with Newmont over Nevada Gold Mines and a Fourmile royalty to Teck threaten Barrick’s planned IPO timing and value realization.
- Loulo-Gounkoto’s restart in Mali is expected to roughly offset production lost from Hemlo and Tongon asset sales by FY26.
- Rising all-in sustaining costs, driven by higher Mali taxes, royalties, and tariffs, are likely to pressure Barrick’s free cash flow margins.
- Barrick now trades at a smaller discount to peers than its historical norm, making the relative valuation perspective less attractive.
- Technical and sentiment indicators show balanced bull and bear forces, pointing to a higher probability of sideways trading around current support.
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