Shares of Barrick Gold (GOLD) are up 11.10% today to $29.99 as of 1:30 p.m. New York time on Monday, August 17.
The continued climb in Barrick Gold shares comes on the strength of an ongoing rally in gold prices and news that broke on Friday that Warren Buffett’s Berkshire Hathaway had bought shares of Barrick Gold during the quarter that ended on June 30.
Interestingly in that context, Barrick Gold has raised its dividend by 14% to 8 cents a share. Barrick CEO Mark Bristow told shareholders in the company’s second quarter report that he thinks gold has room to go higher on a real-dollar basis but that the company will continue to make decisions about further capital investment based on a forecast of $1,200 an ounce. That means no big drive to make new deals and a continued emphasis on selling some non-core assets. That strategy means that Barrick has the cash flow to increase its dividend.
The big asset expansion effort is setting a dispute with the government of Papua New Guinea over its giant Porgera gold mine. Earlier in 2020 the country said it would not renew the license. But the two sides are now talking with an offer from Barrick on the table to split proceeds from the mine at 57% to Papua New Guinea and 43% to Barrick.
For the second quarter adjusted earnings came in at 23 cents a share versus the Wall Street consensus of 18 cents. All-in sustaining costs increased 8.1% to $1,031 an ounce in the second quarter from the previous three months. Barrick reiterated it’s on track to meet its guidance for 2020 production estimated at a range of 4.6 million to 5 million ounces of gold.
Gold for December delivery traded up 2.35% today to $1995.50 an ounce in New York at 1:30 p.m. Shares of Barrick Gold were up 45.94% for 2020 as of the close on Friday, August 14.
Barrick Gold is a member of my Jubak Picks, Dividend, and 50 Stocks portfolios.
Full disclosure: I own Call Options for Barrick with a strike price of $30 and expiration dates of September and December 18 in my personal investment account.