Barrick Mining (B.US) net profit increased 50% in the second quarter to US$1.95 billion, and cleared up the IPO hurdle, and gold rebounded to open a window for further profit acceleration

The Zhitong Finance App learned that Barrick Mining (B.US), a global gold mining leader headquartered in Canada, said in a performance report released before the US stock market on Monday that it had reached an important agreement with another mining giant Newmont Corp. (Newmont Corp.) on a large joint venture between the two sides in Nevada, USA, thus paving the way for the Canadian company to accelerate the listing of its North American mining assets on the New York stock market.

Under an agreement announced Monday, Newmont will pay Barrick Mining $1.95 billion, while the two companies inject assets not previously included in the joint venture, including Barrick Mines' Fourmile project and Newmont's Fiberline and Mike gold development project.

The second-quarter results announced by Barrick Mining highlighted that while gold prices were falling month-on-month, the company's operating side still maintained high profits and production returns. At the same time, the company still repurchased approximately US$1,209 million of shares and announced a quarterly dividend of $0.175 per share. Shareholder returns in a single quarter reached about US$1.5 billion, an increase of 242% over the previous year, indicating that management still believes that there is a clear discount in the value of its assets. More importantly, the company maintained annual gold production of 2.9 million to 3.25 million ounces and the critical AISC target of US$176-1,950 per ounce, while reducing its annual attributable capital expenditure from US$4 billion to US$4.45 billion to US$3.8-4.2 billion.

AISC, or All-In Sustaining Cost (All-In Sustaining Cost), refers to the comprehensive unit cost required for a gold mine to maintain its current production capacity. It usually includes cash mining costs, maintenance capital expenses, management expenses, mining site exploration, royalties, and reclamation expenses. Therefore, it is a core indicator for measuring “how much continuous operating costs does Barrick Mining actually need to pay for every ounce of gold produced”; the larger the difference between gold prices and AISC, the stronger the mine's profit elasticity.

Barrick Mining accelerates major asset IPOs in North America

As the world's third-largest producer of gold resources, Barrick Mining is actively seeking an initial public offering (IPO) of its North American assets, hoping to restart after a series of operational setbacks and management turbulence, including the sudden departure of Mark Bristow, who had been at the helm of the company for a long time, in September last year. Barrick Mining has also been lagging behind rivals such as Newmont and Agnico Eagle Mines Ltd., and appears unable to fully benefit from the record rise in gold prices during 2025.

Some media previously reported in February of this year that Newmont wants Barrick Mining to resolve its perceived poor performance of Nevada assets before proceeding with an IPO. Earlier this year, Newmont issued an alleged breach of contract notice to Barrick Mining after discovering evidence of poor management and actual mining operations in the Nevada joint venture.

After resolving the differences between the two parties, Barrick Mining appointed Mark Hill as CEO of its proposed North American business in an important statement on Monday. Although some major shareholders oppose the IPO plan to split North American mining assets because they are unwilling to dilute their exposure to Barrick Mining's most valuable assets, the company is still pushing to complete the IPO before the end of this year.

Barrick Mining Chairman John Thornton said the IPO will enable investors to fully unlock the value of North American assets. However, according to previous media reports, the plan is being opposed by some major shareholders, including Van Eck Associates Corp, Mackenzie Financial Corp, and Franklin Equity Group.

In terms of newly released performance data, Barrick Mining's second-quarter adjusted earnings per share were 82 cents, in line with the median expectations of Wall Street analysts. Gold production increased 11% to 796,000 ounces during the period, higher than the market's unanimous expectations. The company reiterated the annual production guidelines previously given, that is, gold production is about 2.9 million to 3.25 million ounces, and copper production is expected to be about 190,000 to 220,000 tons.

Barrick Mining shares fell 6.1% in pre-market trading in New York on Monday after the announcement of the latest IPO plan and the latest quarterly results.

The sharp rebound in gold prices opens a window for Barrick Mining's profit acceleration in the second half of the year

While gold prices fell sharply in the second quarter and even the first half of the year, Barrick Mining's operating side maintained high profits and production returns. Revenue for the second quarter reached US$5.292 billion, up 44% year on year; net profit of US$1,217 billion, up 50% year on year; adjusted net profit of US$1,363 billion, up 70% year on year. The adjusted EBITDA of owned companies reached US$2,545 billion, up 51% year on year, and profit margin was still as high as 60%. Gold production reached 796,000 ounces, up 11% from the first quarter, and above the company's quarterly guideline limit of 730,000 to 770,000 ounces; sales volume was 801,000 ounces, up 4% year on year.

What is really worth noting is that in the second quarter, Barrick achieved a gold price of 4,417 US dollars/ounce, down 8% from month to month, while AISC rose to 1,866 US dollars/ounce, up 9% month-on-month and 11% year-on-year, which means that the company still achieved significant year-on-year profit growth under the double pressure of “falling sales price+rising fuel, grade, and royalties,” proving that the current profit base is far higher than the previous gold cycle. Operating cash flow was US$1.704 billion, up 28% year on year. Cash at the end of the period was US$5.927 billion and debt of US$4.682 billion. Net cash of approximately US$1,245 billion was maintained, and the balance sheet remains stable.

However, the second-quarter results also clearly revealed Barrick Mining's biggest fundamental constraint right now — costs are eating up part of the gold price dividend, so future stock price flexibility depends on “whether the rate of gold price re-upward can exceed the rate of AISC's rise.” Free cash flow attributable to the second quarter was only US$141 million, down 33% year on year and 88% month on month. The main background was that project capital expenditure continued, and total capital expenditure rose to US$1,189 billion; at the same time, the company still repurchased approximately US$1,209 million of shares and declared a quarterly dividend of $0.175 per share. Shareholder returns in a single quarter reached about US$1.5 billion, an increase of 242% year on year, indicating that management still believes that there is a clear value discount on its assets.

More importantly, the company maintains annual gold production of 2.9 million to 3.25 million ounces and AISC guidelines of 1,760-1,950 US dollars/ounce, while reducing annual attributable capital expenditure from 4 billion to 4.45 billion US dollars to 3.8 billion to 4.2 billion US dollars; Fourmile will begin underground slope development in the third quarter, Lumwana expansion still plans to achieve the first batch of copper production by the end of the first quarter of 2028, and the agreement reached with Newmont brought in another 1.95 billion US dollars in cash and expanded the Nevada asset portfolio to close to 100 million ounces by the end of the year North American asset IPOs clear the biggest hurdle.

Looking at the overall gold price path, Barrick Mining's risk-return ratio in the second half of the year was clearly better than at the end of June, but it has yet to return to the extreme smooth wind environment of the first quarter. Spot gold once fell to about 4,027 US dollars/ounce on June 30, with a cumulative decline of 11.2% during the month, setting one of the worst quarterly performance backgrounds since 2013, mainly due to the US-Iran conflict driving up inflation and expectations of the Federal Reserve's interest rate hike.

Statistics show that as of August 10, spot gold had recovered to about 4,345 US dollars/ounce and hit a seven-week high last Friday, rebounding about 8% from the low at the end of June. The main reason was that weak US employment data drastically cooled the probability of interest rate hikes in September. This means that gold has escaped the most dangerous “high inflation+high interest rate” double death at the end of the second quarter, but the current spot price of gold is still lower than Barrick Mining's actual price of 4,417 US dollars in the second quarter and the company's assumption of 4,500 US dollars for the whole year, highlighting that profit headwinds are rapidly easing, rather than re-entering the Q1 style excess profit explosion.