Barrick Gold (B.US) reported a 50% increase in net profit for the second quarter, reaching $1.95 billion, clearing the way for its IPO. The rebound in gold prices opens a window for accelerated profits.

Headquartered in Canada, the global gold mining leader Barrick Gold Corporation (B.US) announced in its earnings report released before U.S. stock trading on Monday that it has reached a significant agreement with another mining giant, Newmont Corporation, regarding their large joint venture in Nevada, thereby accelerating the path for this Canadian company to list its North American mining assets on the New York stock market ahead of its final IPO. According to the agreement announced on Monday, Newmont will pay Barrick Gold $1.95 billion, while both companies will inject previously unincorporated assets into the joint venture, including Barrick's Fourmile project and Newmont's Fiberline and Mike large gold mining development projects. Barrick Gold's second-quarter results highlight that despite a decline in gold prices, the company has maintained high profitability and production levels. Additionally, the company repurchased approximately $1.209 billion in stock and announced a quarterly dividend of $0.175 per share, leading to a total shareholder return of about $1.5 billion for the quarter, a year-on-year increase of 242%, indicating that management still sees significant undervaluation in its assets. Importantly, the company maintained its annual gold production guidance of 2.9 to 3.25 million ounces and a crucial All-In Sustaining Cost (AISC) guidance of $1,760 to $1,950 per ounce, while lowering its full-year capital expenditure guidance from $4 billion to $4.45 billion down to $3.8 billion to $4.2 billion. AISC, or All-In Sustaining Cost, refers to the total cost per unit required to maintain the current production capacity of a gold mine, typically including cash mining costs, sustaining capital expenditures, management expenses, mining area exploration, royalties, and reclamation costs. Therefore, it is a key metric for measuring how much ongoing operational cost is truly necessary for Barrick Gold to produce one ounce of gold; the larger the gap between gold prices and AISC, the stronger the profit elasticity of the mine is usually. Barrick Gold Accelerates North American Major Asset IPO As the third largest producer of Gold Resource Corporation globally, Barrick Gold is actively seeking to conduct an initial public offering (IPO) of its North American assets, aiming to restart after a series of operational setbacks and management upheaval, including the sudden departure of longtime CEO Mark Bristow last September. Barrick has also lagged behind competitors like Newmont and Agnico Eagle Mines Ltd. and appears to have failed to fully benefit from the record rise in gold prices during 2025. Previously, media reports in February suggested that Newmont wanted Barrick to resolve what it perceived as poor performance issues regarding its assets in Nevada before proceeding with the IPO. Earlier this year, Newmont issued what it called a default notice to Barrick after discovering evidence of mismanagement of the Nevada joint venture. After resolving the differences between the two parties, Barrick announced the appointment of Mark Hill as the CEO of its planned North American business in a significant statement on Monday. Despite some major shareholders opposing the IPO plan to split the North American mining assets, as they do not wish to dilute their exposure to Barrick's most valuable assets, the company is still pushing to complete the IPO by the end of this year. Barrick's Chairman John Thornton stated that this IPO will enable investors to fully unlock the value of the North American assets. However, according to previous media reports, the plan is facing opposition from several major shareholders, including Van Eck Associates Corp, Mackenzie Financial Corp, and Franklin Equity Group. In terms of the latest earnings data, Barrick Gold reported an adjusted earnings per share of $0.82 for the second quarter, in line with the Wall Street analyst median estimate. During this period, gold production increased by 11% to 796,000 ounces, surpassing market consensus expectations. The company reiterated its previously provided annual production guidance, forecasting gold production of approximately 2.9 to 3.25 million ounces, with copper production expected to be around 190,000 to 220,000 tons. After the announcement of the latest IPO plan and the recent quarterly performance, Barrick's stock price fell by 6.1% in pre-market trading on Monday. Gold Price Surge Opens Barrick's Profit Acceleration Window for the Second Half Despite a significant decline in gold prices in the second quarter and the first half of the year, Barrick maintained high profitability and production levels. Second-quarter revenue reached $5.292 billion, a 44% year-on-year increase; net profit was $1.217 billion, a 50% year-on-year increase, and adjusted net profit was $1.363 billion, a 70% year-on-year growth, while adjusted EBITDA attributable to the company reached $2.545 billion, representing a 51% increase, with a profit margin still as high as 60%. Gold production reached 796,000 ounces, up 11% from the first quarter and above the company's quarterly guidance upper limit of 730,000 to 770,000 ounces; sales amounted to 801,000 ounces, a 4% year-on-year increase. Notably, in the second quarter, Barrick realized an average gold price of $4,417 per ounce, a decrease of 8% quarter-on-quarter, while AISC rose to $1,866 per ounce, a 9% quarter-on-quarter increase and an 11% year-on-year increase. This indicates that, under the dual pressures of "falling prices + rising fuel, grade, and royalties," the company still achieved substantial year-on-year profit growth, demonstrating that the current profit base is far higher than during the previous gold cycle. Operating cash flow was $1.704 billion, a 28% year-on-year increase, and cash at the end of the period was $5.927 billion, with debt of $4.682 billion, maintaining a net cash position of approximately $1.245 billion, indicating a robust balance sheet. However, the second-quarter performance also clearly revealed Barrick's most significant fundamental constraint costs are eating into some of the gold price benefits. Therefore, future stock price elasticity will depend on whether "the speed of gold price recovery can surpass the rate of AISC increase." Free cash flow attributable to the second quarter was only $141 million, down 33% year-on-year and 88% quarter-on-quarter, primarily due to a front-loading of project capital expenditures, with total capital expenditures rising to $1.189 billion; during the same period, the company repurchased approximately $1.209 billion in stock and declared a quarterly dividend of $0.175 per share, totaling around $1.5 billion in shareholder return for the quarter, a 242% year-on-year increase, indicating that management still believes there is significant undervaluation in its assets. More importantly, the company maintained its annual gold production guidance of 2.9 to 3.25 million ounces and AISC guidance of $1,760 to $1,950 per ounce, while lowering its full-year capital expenditure guidance from $4 billion to $4.45 billion down to $3.8 billion to $4.2 billion; the Fourmile project will commence underground slope development in the third quarter, and the Lumwana expansion is still planned to achieve its first copper production by the end of the first quarter of 2028. The agreement reached with Newmont also brought in $1.95 billion in cash and expanded the Nevada asset portfolio to nearly 10 million ounces, clearing the largest hurdle for the upcoming North American asset IPO by the end of the year. Considering the gold price trajectory, Barrick Gold's risk-reward ratio for the second half of the year is already significantly better than at the end of June, but it has not yet returned to the extreme tailwind environment of the first quarter. Spot gold fell to around $4,027 per ounce by June 30, logging an 11.2% decrease for that month, marking one of the worst quarterly performances since 2013, primarily due to the U.S.-Iran conflict raising inflation and the Federal Reserve's interest rate hike expectations. Statistics show that as of August 10, spot gold has rebounded to approximately $4,345 per ounce, reaching a seven-week high last Friday, a rebound of around 8% from the June low, mainly due to weak U.S. employment data significantly reducing the likelihood of a rate hike in September. This indicates that gold has escaped the most dangerous "high inflation + high interest rate" dual blow at the end of the second quarter, but the current spot trading price remains lower than Barrick's second quarter realization price of $4,417 and the company's full-year assumption of $4,500, highlighting that the profit headwinds are rapidly easing, rather than re-entering the excessive profit explosion seen in Q1.