Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Barrick Gold Corporation (USA) (ABX) is a Long Term Gainer

Page 1 of 2

Headquartered in Canada, Barrick Gold Corporation (USA) (NYSE:ABX) is the largest gold mining company in the world. The company has four regional business units in North America, South America, Africa and Australia.

Barrick Gold Earnings

On the Feb. 14 Barrick Gold released its earnings for 4Q12.  The company reported a net loss of $3.06 billion or $3.06 per share, which included an impairment charge of $4.2 billion. Adjusted net earnings stood at $1.1 billion.

Barrick Gold Corporation (USA) (NYSE:ABX)Barrick reported a net loss of $0.67 billion, or $0.66 per share, for the full year, including impairment charges of $4.4 billion. Adjusted net earnings were $3.83 billion or $3.82 per share while the operating cash flows were $5.44 billion. For the full year, gold production stood at 7.42 million ounces whereas for the quarter, it was 2.02 million ounces. Cash cost per ounce was $584 for the quarter and the year.

What’s in store for the future?

The company would soon be reporting an all-in sustaining cash cost for gold that would reflect the true cost of total gold produced. The company has no plans of building new mines in the near future as its current ore-bodies hold a significant output potential. The company has plans of investing more in Nevada, where Barrick has its biggest Goldrush deposit–Nevada contributed more than 40% of its total production last year. Barrick expects an average annual production of 1.5 million ounces from Pueblo Viejo and Pascua-Lama at an average all-in sustaining cash cost of $250-$350 per ounce. Further, the company has plans of selling Barrick Energy, plus its mines that have high operating costs and short lives.

For 2013, Barrick has lowered its production estimates for Goldstrike, Cortez, Lagunas Norte and Veladero. Moreover, it has also lowered its production guidance for African Barrick Gold.


Barrick Gold is trading at a forward P/E (1yr) of 4.46x, depicting the fact that it’s relatively cheap in the gold industry. It’s yielding a dividend of 2.50% and has a healthy PEG of 1.67. Using an average forward P/E (1yr) of 11x, we can value Barrick Gold. However, as Barrick Gold isn’t expected to produce that much gold in the near future, we would value it using a discount of 15%. Hence, we would use a forward P/E (1yr) of 9.35x.

Using consensus estimates, we value Barrick Gold at $44.97; hence, it’s undervalued by almost 38%. Therefore, it still has a significant upside potential at this point in time.

The Rest of the Gold Industry

The Toronto based gold producer, IAMGOLD Corporation (USA) (NYSE:IAG) is trading at a forward P/E (1yr) of 8.16x and has a dividend yield of 3.20%. Company’s cash per share stands at $2.43 that is almost 5 times its current dividend; hence, IAMGOLD can grow its dividends in the future without any hassle. Further, a strong current ratio of 4.20 depicts company’s healthy liquidity. However, IAMGOLD has a negative PEG of 2.41; hence, it’s not expected to grow like its top peers in the future. A mean recommendation of 2.7 on the sell side tells the same story. Using earnings estimates, we value IAMGOLD Corporation at $9.94. Therefore, it has an upside potential of almost 25%.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!