Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] shares rallied Monday August 17 following reports that Warren Buffett’s Berkshire Hathaway Inc. has added shares of the world’s second largest gold miner to its portfolio.
According to a regulatory filing, Berkshire has taken a new position in Barrick by adding 20.9 million shares or 1.2% of the company, with a current market value of US$565 million.
The move follows a correction in the price of gold and silver last week, triggered by COVID-19 vaccine hopes, better-than-expected U.S. data, a stronger dollar, and rising real yields. The yellow metal had previously been trading close to record highs and on Monday was priced at US$1,983.70/oz, up US$51.25 on the day.
Buffett, billionaire Berkshire Chairman, has previously been cautious about investing directly in gold. So, this investment is viewed as an endorsem*nt of an industry where producers are benefiting from the surging bullion price. That in turn is providing a boost to bottom line profits after costs in the industry have steadied in recent years.
On Monday, Barrick shares jumped 11.18% or $4.00 to $39.79 and currently trade in a 52-week range of $17.53 and $40.62.
Barrick Gold emerged as the world’s second largest gold producer last year after completing a merger with Randgold Resources. It has mining operations and projects in 15 countries, including Canada, Argentina, Chile, the DRC, Senegal and the US.
However, the company said its crowning achievement was the decision to combine its Nevada assets with those of Newmont Goldcorp Corp., [NGT-TSX; NEM-NYSE]. Nevada Gold Mines, an entity owned 61.5% by Barrick and 38.5% by Newmont Goldcorp, is now the world’s single largest gold mining complex. Consisting of eight mines and associated infrastructure, it is capable of producing 3.5 million ounces of gold annually.
Barrick said this area is going to be one of its main hunting grounds this year and beyond.
Meanwhile, Barrick has said it is making significant progress towards its goal of becoming the world’s most valued gold company.
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Buffett-led Berkshire Hathaway has sold $317 million worth of shares of Canadian miner Barrick Gold Corporation barely after a couple of quarters of buying them. The decision to sell the shares was as surprising as the decision to buy them.
Most notably, in a 2011 letter to Berkshire Hathaway's shareholders, Buffett highlighted gold as an asset with limited utility and productivity. He noted that buyers of gold do so with the expectation that someone else will pay more for it in the future.
Given Buffett's aversion to gold, market watchers were understandably surprised when Berkshire Hathaway invested in Barrick Gold (TSX:ABX,NYSE:GOLD) in Q2 2020, paying around US$560 million for about 21 million shares of the major gold miner.
Van Eck Associates Corp is the largest individual Barrick Gold shareholder, owning 77.50M shares representing 4.41% of the company. Van Eck Associates Corp's Barrick Gold shares are currently valued at $1.32B. If you're new to stock investing, here's how to buy Barrick Gold stock.
Is GOLD a Buy, Sell or Hold? Barrick Gold Corporation has a consensus rating of Strong Buy which is based on 9 buy ratings, 1 hold ratings and 0 sell ratings.
Additionally, the company could be a top pick for growth investors. GOLD has a Growth Style Score of B, forecasting year-over-year earnings growth of 20.2% for the current fiscal year. Five analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024.
The United States has the most gold reserves and has nearly as many reserves as the combined total of the next three countries with the largest gold holdings: Germany, Italy, and France.
He has invested almost $1 billion in silver, so the reason for his aversion is not simply a dislike for precious metals. The explanation for Buffett's dislike of gold and for his enthusiasm about silver stems from his basic value investing principles.
In November, 21 Indigenous residents near the North Mara mine sued Barrick Gold in Canada over human rights violations. In December, the legal fight continued with a lawsuit against a London-based gold market association for certifying Barrick's gold from North Mara as responsibly sourced.
Based on short-term price targets offered by 18 analysts, the average price target for Barrick Gold comes to $21.82. The forecasts range from a low of $18.00 to a high of $26.15. The average price target represents an increase of 25.11% from the last closing price of $17.44.
Barrick Gold long term debt for 2023 was $4.715B, a 1.13% decline from 2022. Barrick Gold long term debt for 2022 was $4.769B, a 7.13% decline from 2021. Barrick Gold long term debt for 2021 was $5.135B, a 0% decline from 2020.
In 1989, renowned investor Warren Buffett purchased a majority stake in Borsheims, making it part of his famous holding company, Berkshire Hathaway. As part of the Berkshire Hathaway family, Borsheims grew exponentially and gained global notoriety.
Over 30 years ago, Warren Buffett, CEO of Berkshire Hathaway, made his first purchase of silver in anticipation of the metal's demonetization by the U.S. Government. Since that time he has followed silver's fundamentals but no entity he manages has owned it.
Barrick Gold shares were under pressure after production fell and costs rose in the first quarter of the year, though the Canadian miner said it was on track to hit its targets for the year.
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