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Is Barrick Mining's Slumping Gold Output a Red Flag Amid Rising Costs?
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Key Takeaways
Barrick's Q1 gold production dropped 19% year over year to 758,000 ounces, its weakest in recent years.
The Loulo-Gounkoto suspension and lower Carlin and Cortez output drove the production setback.
B expects 2025 gold output of 3.15-3.5M oz, down from 2024's 3.91M, excluding potential mine restarts.
Barrick Mining Corporation (B - Free Report) saw a significant decline in gold production in first-quarter 2025 amid operational challenges, delivering 758,000 ounces — a 19% drop from the year-ago quarter and a 30% decline from the prior quarter. This was also the lowest quarterly output in recent years. This downturn was primarily due to the suspension of operations at the Loulo-Gounkoto mine amid Barrick’s dispute with the Malian government over dividing the economic benefits, and lower output across Carlin and Cortez. Lower production also contributed to a surge in its unit costs, with all-in-sustaining costs — the most important cost metric of miners — jumping 20% year over year.
The company provided a tepid forecast for 2025, with attributable gold production expected in the range of 3.15-3.5 million ounces, excluding production from Loulo-Gounkoto. While a potential restart of the mine would provide an upside, this projection suggests a year-over-year decline from 3.91 million ounces in 2024. Higher production from Pueblo Viejo, Turquoise Ridge, Porgera and Kibali, along with stable performance across Carlin and Cortez, is expected to be offset by reduced production across Veladero and Phoenix.
Among its major peers, Newmont Corporation (NEM - Free Report) reported a roughly 8% year-over-year decline in gold production for the first quarter, reaching 1.54 million ounces. Lower contributions from non-core operations weighed on Newmont’s production. Newmont, which has shifted its focus on Tier 1 assets by divesting non-core businesses, anticipates maintaining its expected gold production for 2025 at about 5.9 million ounces.
Agnico Eagle Mines Limited (AEM - Free Report) saw a modest year-over-year decline of around 0.5% in gold production to 873,794 ounces on lower output at Canadian Malartic. Agnico Eagle wrapped up the acquisition of O3 Mining during the quarter, adding the Marban project, which is expected to contribute around 130,000 ounces of gold per year to the Canadian Malartic complex. Agnico Eagle remains on track to meet its 2025 gold production target of around 3.3-3.5 million ounces.
Barrick's first-quarter production performance underscores the urgent need for the company to resolve geopolitical challenges and restore operational stability. It must focus on mitigating operational risks and cranking up production to maintain its position in the industry.
The Zacks Rundown for B
Shares of Barrick have popped 31.1% year to date against the Zacks Mining – Gold industry’s rise of 46.7%, largely a function of the gold price rally.
Image Source: Zacks Investment Research
From a valuation standpoint, B is currently trading at a forward 12-month earnings multiple of 10.8, a roughly 21% discount when stacked up with the industry average of 13.66X. It carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for B’s 2025 and 2026 earnings implies a year-over-year uptick of 34.1% and 26.6%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.
Image: Bigstock
Is Barrick Mining's Slumping Gold Output a Red Flag Amid Rising Costs?
Key Takeaways
Barrick Mining Corporation (B - Free Report) saw a significant decline in gold production in first-quarter 2025 amid operational challenges, delivering 758,000 ounces — a 19% drop from the year-ago quarter and a 30% decline from the prior quarter. This was also the lowest quarterly output in recent years. This downturn was primarily due to the suspension of operations at the Loulo-Gounkoto mine amid Barrick’s dispute with the Malian government over dividing the economic benefits, and lower output across Carlin and Cortez. Lower production also contributed to a surge in its unit costs, with all-in-sustaining costs — the most important cost metric of miners — jumping 20% year over year.
The company provided a tepid forecast for 2025, with attributable gold production expected in the range of 3.15-3.5 million ounces, excluding production from Loulo-Gounkoto. While a potential restart of the mine would provide an upside, this projection suggests a year-over-year decline from 3.91 million ounces in 2024. Higher production from Pueblo Viejo, Turquoise Ridge, Porgera and Kibali, along with stable performance across Carlin and Cortez, is expected to be offset by reduced production across Veladero and Phoenix.
Among its major peers, Newmont Corporation (NEM - Free Report) reported a roughly 8% year-over-year decline in gold production for the first quarter, reaching 1.54 million ounces. Lower contributions from non-core operations weighed on Newmont’s production. Newmont, which has shifted its focus on Tier 1 assets by divesting non-core businesses, anticipates maintaining its expected gold production for 2025 at about 5.9 million ounces.
Agnico Eagle Mines Limited (AEM - Free Report) saw a modest year-over-year decline of around 0.5% in gold production to 873,794 ounces on lower output at Canadian Malartic. Agnico Eagle wrapped up the acquisition of O3 Mining during the quarter, adding the Marban project, which is expected to contribute around 130,000 ounces of gold per year to the Canadian Malartic complex. Agnico Eagle remains on track to meet its 2025 gold production target of around 3.3-3.5 million ounces.
Barrick's first-quarter production performance underscores the urgent need for the company to resolve geopolitical challenges and restore operational stability. It must focus on mitigating operational risks and cranking up production to maintain its position in the industry.
The Zacks Rundown for B
Shares of Barrick have popped 31.1% year to date against the Zacks Mining – Gold industry’s rise of 46.7%, largely a function of the gold price rally.
From a valuation standpoint, B is currently trading at a forward 12-month earnings multiple of 10.8, a roughly 21% discount when stacked up with the industry average of 13.66X. It carries a Value Score of A.
The Zacks Consensus Estimate for B’s 2025 and 2026 earnings implies a year-over-year uptick of 34.1% and 26.6%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.
B stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.