Barrick Announces New Share Buyback Program
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Insights
The announcement of Barrick Gold Corporation's new share repurchase program represents a significant financial strategy that can have various implications for the company's stock valuation and shareholder value. Share repurchase programs are often initiated by companies who believe their stock is undervalued. By reducing the number of outstanding shares, the earnings per share (EPS) may increase, potentially leading to a higher stock price. Furthermore, this buyback signals to the market that the company is confident in its financial health and future prospects.
It is noteworthy that Barrick has not utilized its 2023 share repurchase program, possibly indicating a strategic shift or a more favorable cash position in 2024. The allocation of $1.0 billion for the repurchase over the next 12 months is a substantial commitment that could enhance shareholder returns. However, investors should also consider the opportunity cost of this use of cash, as it could have been deployed towards further capital investments or debt reduction. The discretionary nature of the program allows the company flexibility in managing its capital allocation in response to market conditions and internal financial performance.
From a market perspective, Barrick's decision to initiate a new share repurchase program could be interpreted as a positive signal, potentially influencing investor sentiment and the company's market capitalization. The timing and scale of buybacks can impact the stock's liquidity and volatility. As Barrick operates in the gold mining sector, commodity prices can significantly affect its profitability and cash flow availability for such buyback programs. It is essential to monitor gold price trends and industry-specific factors that might influence Barrick's operational results and, consequently, its ability to execute the repurchase program as planned.
Investors should also be aware of the broader economic context, including interest rate trends and inflation, as these can affect gold prices and investment strategies in the commodities sector. The repurchase program's impact on the stock market will largely depend on the execution timing and the market's perception of Barrick's underlying value relative to its share price at the time of the buybacks.
An economist's perspective on Barrick Gold Corporation's share repurchase program would consider the macroeconomic implications of such a financial maneuver. In a broader economic context, share buybacks can be a response to favorable tax treatments or a reflection of a lack of lucrative investment opportunities within the company's core business sectors. This could suggest a mature industry with slower growth prospects, prompting companies to return capital to shareholders rather than reinvesting it internally.
Additionally, an economist would assess the impact of current monetary policies, such as interest rates, which influence the cost of borrowing and can affect a company's decision to finance share repurchases with debt. Considering the cyclical nature of commodity-based industries, Barrick's decision to buy back shares might also reflect an attempt to stabilize stock prices during periods of market volatility, which is often observed in the gold market due to its status as a safe-haven asset.
All amounts expressed in US dollars
TORONTO, Feb. 14, 2024 (GLOBE NEWSWIRE) -- Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (“Barrick” or the “Company”) announced today that it plans to undertake a new share repurchase program for the buyback of its common shares.
Barrick’s Board of Directors has authorized a new program for the repurchase of up to
Under the program, repurchases can be made from time to time through published markets in the United States such as the New York Stock Exchange using a variety of methods, including open market purchases, as well as by any other means permitted under the rules of the U.S. Securities and Exchange Commission and other applicable legal requirements.
Barrick believes that, from time to time, the market price of its common shares trade at prices that may not adequately reflect their underlying value. The actual number of shares that may be purchased, if any, and the timing of such purchases, will be determined by Barrick based on a number of factors, including the Company’s financial performance, the availability of cash flows, and the consideration of other uses of cash, including capital investment opportunities, returns to shareholders, and debt reduction.
The repurchase program does not obligate the Company to acquire any particular number of common shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.
Enquiries:
President and CEO
Mark Bristow
+1-647-205-7694
+44 788 071 1386
Senior EVP and CFO
Graham Shuttleworth
+1-647-262-2095
+44 779 771 1338
Investor and Media Relations
Kathy du Plessis
+44 20 7557 7738
Email: barrick@dpapr.com
Website: www.barrick.com
Cautionary Statement on Forward-Looking Information
Certain information contained or incorporated by reference in this press release, including any information as to our strategy, projects, plans, or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “plan”, “opportunity”, “prospects”, “can”, “will”, “commit”, “would”, “could” and similar expressions identify forward-looking statements. In particular, this press release contains forward-looking statements including, without limitation, with respect to: the expected amount and timing of share purchases under Barrick’s new share repurchase program; the expectation that the Company will have the financial strength to undertake the contemplated share repurchase program during the relevant period; and the potential that the share repurchase program may be suspended or discontinued by the Company at any time.
Forward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by the Company as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper, or certain other commodities (such as silver, diesel fuel, natural gas, and electricity); the speculative nature of mineral exploration and development; assumptions relating to the trading price of the Company’s common shares; changes in mineral production performance, exploitation, and exploration successes; risks related to disruption of supply routes which may cause delays in construction and mining activities, including disruptions in the supply of key mining inputs due to the invasion of Ukraine by Russia; whether benefits expected from recent transactions are realized; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges and disruptions in the maintenance or provision of required infrastructure and information technology systems; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; uncertainty whether some or all of targeted investments and projects will meet the Company’s capital allocation objectives and internal hurdle rate; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; the impact of inflation, including global inflationary pressures driven by ongoing supply chain disruptions, global energy cost increases following the invasion of Ukraine by Russia as well as conflicts in the Middle East; fluctuations in the currency markets; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in the jurisdictions in which the Company or its affiliates do or may carry on business in the future; lack of certainty with respect to foreign legal systems, corruption and other factors that are inconsistent with the rule of law; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; the possibility that future exploration results will not be consistent with the Company’s expectations; risks that exploration data may be incomplete and considerable additional work may be required to complete further evaluation, including but not limited to drilling, engineering and socioeconomic studies and investment; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; risks associated with illegal and artisanal mining; risks associated with new diseases, epidemics and pandemics, including the effects of the global Covid-19 pandemic; litigation and legal and administrative proceedings; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, the Company; our ability to successfully integrate acquisitions or complete divestitures; risks associated with working with partners in jointly controlled assets; employee relations including loss of key employees; increased costs and physical risks, including extreme weather events and resource shortages, related to climate change; and availability and increased costs associated with mining inputs and labor. In addition, there are risks and hazards associated with the business of mineral exploration, development, and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks).
Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release.
Barrick disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.
FAQ
What is the purpose of Barrick Gold Corporation's (NYSE:GOLD) new share repurchase program?
How much did Barrick Gold Corporation (NYSE:GOLD) repurchase under its 2022 program?
What methods can Barrick Gold Corporation (NYSE:GOLD) use for share repurchases?
Is Barrick Gold Corporation (NYSE:GOLD) obligated to acquire a specific number of common shares under the repurchase program?
