Entry of a new major shareholder at the Canadian gold and copper producer Barrick Mining (WKN A417GQ)! According to information from the Financial Times, US hedge fund Elliott Management has built up a significant stake in Barrick. The entry of the well-known activist investor comes at a time when structural changes at Barrick Mining are already being speculated about – up to a possible split of the group into two independent companies.
The trigger for the recent debate was a report by the Reuters news agency last week. According to the report, Barrick Mining’s board of directors is considering splitting the company into one unit with North America-focused assets and a second with mines in Africa and Asia. The North American assets are considered politically and regulatorily more stable, while projects in African and Asian countries are often assessed by investors as having higher risks.
Barrick Mining: Debate on Split and Realignment
The question of Barrick Mining’s future structure has been increasingly discussed since the surprising departure of CEO Mark Bristow at the end of September. Analysts and investors have since repeatedly raised the possibility of a realignment. The focus is particularly on the idea of streamlining the portfolio, divesting assets, and more clearly separating the geographical risk structure.
A split would at the same time reverse essential elements of the group’s recent history. Barrick Mining was formed in its current form in 2019 through the acquisition of Randgold. At that time, Bristow primarily brought the African mines into the group, which now represent precisely the region being discussed for a separate unit or possible sales.
In parallel, Bloomberg reported that US competitor Newmont had at times considered a possible deal to gain more control over Barrick’s Nevada assets. The gold mines in Nevada are among the group’s most important revenue generators and are operated jointly by Barrick Mining and Newmont. In investor circles, this North American core portfolio, in particular, is considered potentially more highly valued if it were managed in an independent structure.
Elliott Management Pushes into Barrick Mining’s Top 10 Shareholders
The Financial Times does not state an exact stake size, but Elliott Management’s position is said to be large enough to catapult the fund into the group of Barrick Mining’s ten largest shareholders. So far, the group’s largest investors include asset managers such as Capital Research & Management and Vanguard. With Elliott, an actor is now joining who is known for its active, often public, involvement in portfolio companies.
Year-to-date, Barrick’s stock has seen a price increase of approximately 128%, which reflects the group’s strong performance in an environment of high gold prices. The entry of an activist investor during a period of relative share price strength is noteworthy because the pressure does not arise from a crisis, but from the question of whether the group’s value could be better realized through a different structure and strategy.
Elliott Management currently manages approximately $76 billion and is a known entity in the commodities sector. The fund had previously been involved with Anglo American, which has since agreed to a merger with Teck Resources, and also holds a significant stake in the royalty and streaming company Triple Flag Precious Metals. This history suggests that Elliott could also push for changes in Barrick Mining’s corporate strategy or structure, without any concrete demands having been made public so far.
Possible Consequences of a Restructuring for Barrick Mining and the Gold Sector
What a profound restructuring would mean for Barrick Mining is currently still open. A split into a North American company with mines in politically stable jurisdictions such as Canada and the USA, and a second unit with mines in Africa and Asia, could lead to clearer risk differentiation. Investors who primarily focus on stable legal environments could specifically invest in the North American business, while other investors consciously engage in higher-growth, but also more volatile, regions.
At the same time, such a separation would raise the question of how synergies and economies of scale, which Barrick Mining currently utilizes as a global multi-asset producer, would be realized in the future. Purchasing advantages, shared technical expertise, or capital allocation across individual regions would have to be reorganized in a two-company model. Possible asset sales, such as mines with higher political risk, are also being discussed, but have not yet been publicly confirmed by either Barrick or Elliott.
For the gold sector as a whole, a restructuring at Barrick Mining would be a signal with potentially far-reaching effects. As one of the world’s largest gold producers, Barrick serves as a reference company for many investors. Changes in structure, regional focus, or capital strategy could therefore also influence discussions at other large mining companies that are confronted with similar questions regarding risk profile, geographical diversification, and portfolio structure.
In the short term, however, the situation remains characterized by uncertainty. Neither Barrick Mining nor Elliott Management have yet publicly commented on the reports. It is only clear that the entry of a financially strong and experienced activist investor is likely to increase pressure on the management board and supervisory board to carefully examine the strategic options.
