Barrick’s $3B buyback sets stage for North American spinoff

Barrick Mining (TSX: ABX) (NYSE: B) launched a $3-billion share buyback on Monday as the world’s third-largest gold producer seeks to attract investors ahead of a planned spinout of its North American assets.

The Toronto-based miner announced the repurchase authorization Monday after reporting a 13% decline in first-quarter profit from the previous quarter, extending chairman John Thornton’s push to prioritize shareholder returns following a $500-million buyback late last year. 

Barrick is preparing to list a new company holding its Nevada joint venture, the Fourmile discovery and the Pueblo Viejo mine in the Dominican Republic, with the transaction targeted for completion by the end of 2026. 

“Following solid execution and strong free cash flow, this authorization is intended to return cash to shareholders at a time when Barrick sees exceptional value in its own shares, particularly in anticipation of the planned IPO of North American Barrick,” the company said.

The restructuring follows operational setbacks and a broader management shakeup, including the appointment of Mark Hill as CEO earlier this year after longtime chief Mark Bristow’s abrupt departure in September. 

Barrick has also indicated it will pursue acquisitions while reducing exposure to higher-risk jurisdictions as part of an effort to improve valuation after years of declining output and operational challenges.

Gold prices boost

Barrick beat analyst estimates for first-quarter earnings as record gold prices offset weaker production and helped drive a sharp rise in profit. The company’s average realized gold price climbed 66% year-over-year to $4,823 per ounce, while all-in sustaining costs fell 4% to $1,708 per ounce.

Net earnings rose to $1.6 billion, more than triple year-earlier levels, despite gold production declining 5% to 719,000 ounces. Barrick forecast second-quarter output of between 730,000 and 770,000 ounces, with production expected to increase further in the second half of 2026.

BMO analyst Matthew Murphy said Barrick’s results reflected a strong start to the year, with free cash flow of almost $1.6 billion beating estimates and North American and Latin American operations outperforming expectations even as African assets lagged forecasts. Murphy added that lower-than-expected costs helped offset weaker production and left Barrick on track to meet full-year guidance.

“We started the year with another strong quarter,” president and chief executive officer Mark Hill said. “Building on momentum from Q4, we operated safely and outperformed our plan on both gold production and costs.”

“Our focus for the year is clear: continue to improve safety performance, deliver on production and cost guidance, advance our growth projects on time and on budget, and execute the North American Barrick IPO to unlock further shareholder value,” Hill said.

Barrick’s New York-listed shares rose nearly 3% in pre-market trading following the results.

Mali issues

Barrick continues to face operational pressure in Mali, where disruptions at the Loulo-Gounkoto complex have weighed on output and underscored the risks tied to unstable mining jurisdictions.

Last week, contractor Gounkoto Mining Services said it would shut down operations and lay off more than 600 workers after Barrick declined to renew its contract amid an ongoing dispute with the Malian government over taxes and control of the mine. Production at Loulo-Gounkoto remains below historical levels following months of disruption and provisional state administration, contributing to a 23% decline in Mali’s gold output this year.

The operational divide has become increasingly apparent. Open-pit operations at Baboto and Gara West have resumed under local operators, while the Gounkoto open pit and Yalea North underground mine remain idle. 

Barrick regained control of the complex from provisional state administrators in December, but restarting suspended operations has proven difficult as equipment deteriorates, spare parts run low and skilled workers depart during shutdowns.

A key detail often overlooked is that resolving a governance dispute and restoring operations are entirely separate milestones. Infrastructure deteriorates during suspension, spare parts deplete and experienced personnel leave.

As a result, Barrick recently indicated it will pursue acquisitions while scaling back exposure to riskier nations to increase the company’s value after years of operational setbacks and declining output.