According to media reports, Canadian gold producer Barrick Mining (WKN A417GQ) is considering a fundamental restructuring of the group. As reported by news agency Reuters, citing several individuals familiar with the deliberations, a split of the company into two units is being contemplated: one unit focusing on North America, and another on mines in Africa and Asia. Concurrently, a complete sale of the African assets and the Reko Diq copper-gold project in Pakistan is also being discussed.
Barrick Mining has not officially confirmed these plans to date. Interim CEO Mark Hill, when asked, merely stated that the group generally does not comment on speculation. Discussions are still ongoing, and no binding decisions have been made yet, according to company sources.
Barrick Mining Considers Separation of African and Asian Portfolio
The core of these considerations is thus to more clearly separate Barrick Mining’s broadly diversified global portfolio. One option would be to spin off the mines in Africa and Asia into a separate unit or to divest parts of them. These include, among others, stakes and projects in Mali, Tanzania, the Democratic Republic of Congo, Papua New Guinea, as well as the major Reko Diq development in Pakistan.
According to the information, a possible sale of the African assets also depends on ongoing local conflicts. For instance, Barrick first wants to resolve a dispute with the local military government in Mali before a sale could be implemented. In the West African country, disputes arose in connection with a new mining tax regime, which already had concrete consequences for the group.
In the case of Reko Diq – a major copper-gold project in Pakistan – a sale might only be considered after the project financing has been finalized. Reko Diq is considered one of the more significant development projects in Barrick Mining’s portfolio, but it is also associated with geopolitical and financial challenges.
Should a split actually occur, this would effectively be a partial reversal of the merger with Randgold Resources completed in 2019. At that time, under then-CEO Mark Bristow, Barrick integrated numerous African assets into the group – the very portfolio that is now again under consideration for divestment.
Strategic Shift: Barrick Mining Prioritizes North America
At the heart of the new considerations is apparently the desire to focus Barrick Mining more strongly on North America. The mines in Nevada, including the Fourmile development project, play a central role in this. Fourmile is considered a significant undeveloped gold deposit in the US state of Nevada, with test production currently planned to begin only in 2029.
According to insiders, a focused North American group is intended to ensure that the group is not undervalued on the stock market – especially in the event of a possible takeover bid by a competitor. An investor is quoted as saying that the Nevada activities alone would have enough substance to rank among the world’s most valuable gold producers as an independent, publicly listed company. Barrick operates the Nevada gold business in a partnership with Newmont.
Interim CEO Mark Hill had already publicly emphasized earlier this week that Barrick Mining would increasingly focus on North America in the future. These statements led to positive market reactions: Analysts, including those at Jefferies, upgraded the stock. Following the report on the possible split plans, Barrick shares gained approximately 3% on the Toronto stock exchange on Friday.
At the same time, many investors continue to view Barrick Mining’s stock as lagging behind the industry. Although the share price has increased by approximately 130% this year, its performance over a five-year period, at around 52%, is significantly below that of competitors like Agnico Eagle, which gained 142% over the same period. Investors had therefore previously suggested separating stable assets like Nevada and Fourmile from the lower-risk segment and bundling riskier projects – such as those in Africa, Papua New Guinea, and Reko Diq – separately.
Political Risks Weigh on Barrick Mining’s International Projects
A significant driver of the debate is the political risks to which Barrick Mining is exposed in some countries. As one of the few large gold corporations with mines on multiple continents, the company benefits from diversification, but at the same time, it operates in regions considered politically fragile.
This became particularly evident in Mali: There, Barrick Mining lost control of its most profitable site, the Loulo-Gounkoto complex, this year. A dispute over the new Malian mining tax code resulted in the seizure of three tons of gold and the appointment of an interim administrator, who now manages the mine. Consequently, the group had to write off approximately US$1 billion.
Against this backdrop, some investors see a clear separation of the regions as a way to make the group’s risk profile more transparent. At the same time, according to an investor, it has previously been argued within the company that without the strong Nevada assets, the remaining group would be less attractive – a reason why Barrick is said to have rejected a split in the past.
In addition to Nevada and Mali, Barrick Mining operates other significant assets, including copper mines in the Democratic Republic of Congo and gold mines in Tanzania, the Dominican Republic, and Papua New Guinea. Together, these projects form a global production portfolio, whose valuation in the capital market, according to some investors, does not fully reflect the earning power of the core assets.
How far the internal plans have actually progressed and whether Barrick Mining will ultimately take the step towards a split or a larger portfolio cleanup remains open. What is clear, however, is that the discussion about the group’s structure, regional focus, and risk profile has gained momentum – not least against the backdrop of high gold prices and an increasingly nuanced view of investors on political risks in the raw materials industry.
