Barrick Gold, Alerio Gold, Newmont - Can these stocks defy the interest rate scare?

Barrick Gold - Analyst expectations exceeded

Barrick Gold announced its official Q4 figures on February 15. Production data and gold reserves had been released earlier. It shows that its strategy of investing in organic growth through exploration and mineral resource management has more than replaced gold reserves for the second year in a row and significantly increased copper resources YOY. Barrick Gold distributed a record USD 1.6 billion to shareholders in 2022 through dividends and share repurchases and has announced a further share repurchase program of up to USD 1 billion over the next twelve months.

According to the latest report, Barrick Gold's Q4 production was 13% higher than the previous quarter, with gold sales reaching about 1.1 million ounces at an average price of USD 1,726 per ounce. The Company's copper production was in line with forecast figures. However, the Company's annual gold production fell just short of set targets. Compared to the previous quarter, sales increased by 10% to about USD 2.77 billion. With earnings of USD 0.13 per share, analysts' expectations were even exceeded.

The fact that gold and copper reserves also continued to rise speaks for good operating decisions. Shareholders will receive a dividend of USD 0.10 per share for the last calendar quarter. Despite the good figures, Barrick Gold subsequently had to lose ground. On February 14, the share price closed at USD 17.81. The closing price on Friday was only USD 16.74. Thus, the share is approaching the oversold area. The launched share buyback program could help stop the downward trend.

Alerio Gold - Fieldwork planned in unexplored areas

Alerio Gold has yet to become a gold producer. The explorer operates two gold projects, the Tassawini Project and the Puruni Project, located in Guyana, South America. The Puruni Gold Project covers 2,259 hectares and is located in a historic gold district that includes the Peters Mine, recognized as the first active gold mine in Guyana. The project is accessible by road, helicopter or riverboat. Significantly more advanced is the Tassawini project, which covers 1,381 hectares and has a historic resource inventory of 499,000 ounces of gold.

In the process, 47,509 m of drilling was completed in 1,279 core and reverse circulation holes, as well as extensive prospecting, metallurgical testing, geophysics and mapping. A total of USD 34 million has already been invested in the project, and there remains potential to expand the defined gold deposit. The project already has established infrastructure, including a working camp, commercial airstrip and ship berths. A mining license was issued in 2021 and is renewable every five years. A topographic map was completed in early December. The results revealed several high-priority targets outside the historic resource area.

Fieldwork is to begin there. A breath of fresh air should be provided by new CEO Allan Fabbro, who was appointed on December 16. Jonathan Challis will remain with the Company as a director. The share is currently trading at CAD 0.065. With the upcoming fieldwork, the share could get new impetus.

Newmont - Wants to swallow Newcrest

Following Barrick Gold's results on February 15, the world's largest gold producer, Newmont, will disclose its figures on February 23. But even before that, there was a bang for the buck. On February 5, Newmont confirmed that it had made a non-binding offer to acquire 100% of the issued share capital of Newcrest Mining Limited (Newcrest). If the transaction were to go through, two major gold producers would be united. Newcrest shareholders would receive 0.380 Newmont shares in exchange for their shares.

Competitor Barrick Gold does not want to counter Newmont's advance and announced that it would not make a counteroffer. CEO Mark Bristow instead saw risks in the takeover. At the same time, he expressed interest in Newmont's shares in Nevada Gold Mines. There, Newmont holds 38.5% of the shares. In an interview with Reuters, Bristow said, "If there were an opportunity to acquire those assets, we would probably like to acquire them."

It will be interesting to see if shareholders will accept the Newmont offer. Newcrest management recommended that its shareholders not accept the offer, saying it was too low. If shareholders accept the deal, they will hold 30% in the combined company. Newmont's stock has lost significant value recently. It was down about 24% from USD 60.08 on January 24. On Friday, the share exited trading at USD 45.42. It will be exciting in the coming weeks.

In contrast to the indices, the gold price is surprisingly stable. Nevertheless, the shares of gold producers are under pressure. Barrick Gold has exceeded analysts' expectations and even increased its reserves. Nevertheless, the share price fell. Alerio Gold is planning fieldwork and wants to regain momentum with the new CEO. Here, one should wait for the upcoming results. Newmont intends to grow and acquire Newcrest in the process. On February 23, the quarterly figures are due. The price reductions in the major producers offer a good entry opportunity.