Investing

Barrick Gold Corp

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Feb 15, 2008
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Calgary
dlhunter wrote: Take a look at FCX, chart doesn't look as bad as ABX and one still gets exposure to gold.
I like it very much - if economy is really improving, demand for copper will rise and gold will be a hedge to inflation.
In the 1930s, the base metals collapsed, and only the precious metals remained robust demand-wise. Which is why mining company profits exploded -- the cost of mining went down because the gold miners of the time were not competing against the base miners for equipment, labour, etc., in the marketplace.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jun 27, 2007
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It's awfully quiet in Barrick land, considering 30%+ performance in the last 45 days or so.
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Feb 15, 2008
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dlhunter wrote: It's awfully quiet in Barrick land, considering 30%+ performance in the last 45 days or so.
They sold, along with Goldcorp, the Nevada Marigold property to Silver Standard Resources. Personally I find the move to be bizarre. But SSRI had a lot of capital just sitting around doing nothing, and the numbers don't look that bad.

http://files.shareholder.com/downloads/ ... 020414.pdf

That's a SSRI presentation. They claim that $150M of capex was done in the past 2 years at the mine. Which they have now acquired for $275M. Really makes you wonder, why Barrick and Goldcorp are unloading such a high quality asset. I have SSRI shares, so its no net loss to me (ie: the mine moves from one balance sheet to another), but if SSRI is finding the mine so darn good, what was so wrong with Barrick/Goldcorp keeping ownership of it. Why are these firms fire-saleing assets at closer to the bottom of the cycle than the top?

And you're right, there has been a bit of a stealth rally in the gold/silver miners, but for most its still a huge amount of pain.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jun 27, 2007
5479 posts
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Mark77 wrote: They sold, along with Goldcorp, the Nevada Marigold property to Silver Standard Resources. Personally I find the move to be bizarre. But SSRI had a lot of capital just sitting around doing nothing, and the numbers don't look that bad.

http://files.shareholder.com/downloads/ ... 020414.pdf

That's a SSRI presentation. They claim that $150M of capex was done in the past 2 years at the mine. Which they have now acquired for $275M. Really makes you wonder, why Barrick and Goldcorp are unloading such a high quality asset. I have SSRI shares, so its no net loss to me (ie: the mine moves from one balance sheet to another), but if SSRI is finding the mine so darn good, what was so wrong with Barrick/Goldcorp keeping ownership of it. Why are these firms fire-saleing assets at closer to the bottom of the cycle than the top?

And you're right, there has been a bit of a stealth rally in the gold/silver miners, but for most its still a huge amount of pain.
I'm only good for a swing trade, their assets don't attract me a lot. Just stating the obvious, shares performed very well and nobody is talking about it - which is very good! When stock is not crowded, it can go much higher before general public takes notice - then I will sell it to them :)
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Feb 15, 2008
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dlhunter wrote: I'm only good for a swing trade, their assets don't attract me a lot. Just stating the obvious, shares performed very well and nobody is talking about it - which is very good! When stock is not crowded, it can go much higher before general public takes notice - then I will sell it to them :)
Why would you buy something that the assets aren't attractive? That's the only reason, IMHO, to buy in the gold mining industry -- you're buying "the assets" for far less than replacement cost. Because as we know, earnings sure as heck aren't that good right now with the low gold price.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jun 27, 2007
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Mark77 wrote: Why would you buy something that the assets aren't attractive? That's the only reason, IMHO, to buy in the gold mining industry -- you're buying "the assets" for far less than replacement cost. Because as we know, earnings sure as heck aren't that good right now with the low gold price.
I bought distressed asset (equities) at a discount. When I needed the metal, I bought physical. As the shareholder, you don't own gold, and I don't trust management that was under performing for years.
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dlhunter wrote: I bought distressed asset (equities) at a discount. When I needed the metal, I bought physical. As the shareholder, you don't own gold, and I don't trust management that was under performing for years.
Well I'd have to disagree, as a shareholder, you certainly do own gold. Its just in the ground as reserves, rather than above-ground. And as it stands, none of the extractive capability could be replicated for anywhere near Barricks' enterprise value. As for management, they've performed just fine. You can't blame them specifically for problems that have plagued the entire industry. I guess it would have been better, in hindsight, if Barrick had not invested a dime in gold mines, and just hired a bunch of engineers to design something like Twitter or Facebook instead -- but most shareholders bought Barrick to be a gold miner.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Feb 11, 2009
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ABX has been performing nicely as of late. My positions bought in the $18's as well as $21.XX is now in profit and was thinking of selling. (Note: I also have shares bought at $33 and $31 I believe that I will be keeping)

Anyone have any reasons why I shouldn't sell? Something I may be missing?

In my personal view, I see both ABX and the entire mining sector falling again soon as the price of metals is going up without changes in fundamentals since the $1200 lows.

Had a limit sell order at $23.75 that didn't fill today, not sure if I will be happy about that or sad about that come monday.
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deal_with_singh wrote: Anyone have any reasons why I shouldn't sell? Something I may be missing?
Well let's see. The going rate for a million ounces per year of gold production with reasonable long-term reserves is around $8-$10B. Barrick has 8 million ounces/year. The firm has an enterprise value in the $40B range. So just to return Barrick to "replacement cost" on its assets, you're looking at still a double from these levels (and that's assuming no devaluation of long-term debt).

Not to say that Barrick can't go down, but being able to buy long-term assets which have mostly been de-risked for 50 cents on the dollar is very attractive.
In my personal view, I see both ABX and the entire mining sector falling again soon as the price of metals is going up without changes in fundamentals since the $1200 lows.
The fundamentals, if anything, are better than ever. And mining costs have been falling in many of the recent earnings reports. I don't follow Barrick a lot, but most of the medium tier silver miners have reported significant progress in cost containment.

But if you're a short term trader, sure, it could go down. The miners have had an incredible run over the past 2 months.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jun 27, 2007
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Now is the time to sit tight and hope for more. It's defining moment, previous high 21.56 and gap at 22.22 important resistance points. If the trend reversed, ABX must clear 22 even for a brief moment before correcting slightly to find support at 19.
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Feb 11, 2009
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Sold 1/3 of my position at $23.70 (Was purchased on margin, and now I'm margin free) :) .
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Feb 11, 2009
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deal_with_singh wrote: Sold 1/3 of my position at $23.70 (Was purchased on margin, and now I'm margin free) :) .
Well, wasn't that lucky! Down almost a $1 from my selling price

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