Spinning off Barrick Mining’s (TSX: ABX; NYSE: B) U.S. assets into a new company or exploring a merger with Newmont (NYSE: NEM) are some of the key options that the Canadian miner’s next CEO will need to weigh, analysts said.
After more than six years in charge, Mark Bristow stepped down as Barrick boss on Sept. 29 without an explanation. His interim replacement, 20-year company veteran Mark Hill, will stay on until the board names a permanent successor.
Bristow’s surprise exit spurred some analysts and investors to speculate that the company might be poised to sell some of its underperforming assets. A breakup of the company could even be envisaged under the right circumstances, according to former Newmont president Pierre Lassonde.
“Is there value in at least looking at some scenarios? I would say yes,” Lassonde told The Northern Miner in an interview.
Longtime mining analyst John Tumazos agrees.
“There are some open strategy questions that have always been possible that a new CEO or the board might address – one of which is to break up into three companies,” Tumazos, head of New Jersey-based Very Independent Research, said in a recent interview.
Share price performance and a personality clash with chairman John Thornton were two key factors in Bristow leaving, according to Lassonde. Under Bristow’s leadership, Barrick’s stock price trailed that of its global peers due to surging costs and repeated profit-target misses.
“It was a culmination of things,” Lassonde said in the interview. “Barrick’s stock price performance was among the worst in the industry and there was a very clear difference in personalities. John Thornton is a financial animal, and Mark Bristow is a mining animal.”
Underperforming stock
Barrick’s Toronto Stock Exchange-traded shares rose about 2.6 times between January 2019 – when Bristow took over – and late September. That trailed the four-fold increase of the TSX Global Gold Index. The stock was trading at $44.89 Friday afternoon, giving the company a market value of about $76 billion (US$54 billion).
Under the spinoff scenario, one new company could house Barrick’s flagship Nevada gold project assets, another could include the higher-risk overseas gold operations and a third could hold the copper properties, Tumazos said. All three would be overseen by a holding company.
“That’s been always an alternative,” he said.
This isn’t the first time that a breakup of Canada’s biggest publicly traded miner has been floated. When Barrick was looking at acquiring Randgold in 2018, investment bankers who approached the company’s top management pitched that very idea, according to a U.K. court ruling issued in March. The dispute between Barrick and boutique investment banking firm H&P Advisory revolved around the payment of fees.
African spinoff
Spinning off assets such as Barrick’s West African operations – including the Loulo-Gounkoto gold complex in Mali, which has been at the center of a bitter dispute with the government – could make sense, Lassonde says.
“It’s becoming more and more difficult to do business in West Africa, so there may be a case where if you put a very large single entity that’s West African-based, it may be able to operate better than if it was part of a company based in Toronto or New York or London,” he said.
Barrick suspended operations at Loulo-Gounkoto, its largest African asset, in January after Mali’s military government seized about three tonnes of gold over alleged unpaid taxes.
Having demanded a greater share of profits, Mali jailed four Barrick employees last November. It also blocked exports and placed Loulo-Gounkoto under state control. That led Barrick to book a US$1-billion impairment charge in August and slash the carrying value of its 80% stake in the mine.
New writedown
Barrick will probably write down the value of its Mali assets to zero when it releases fourth-quarter results early in 2026, said Martin Pradier, a mining analyst at Veritas Investment Research. Even after the second-quarter charge, Barrick still values its Mali mining assets at about US$2.5 billion, he said.
“If I were the auditor, I wouldn’t let you present a balance sheet with any value for Mali,” Pradier said in an interview from Toronto. “After that, go and fight with the Mali government to get any value that you can. Perhaps they will recover something five years down the road, but it shouldn’t be on the balance sheet.”
Barrick’s Reko Diq copper-gold project in Pakistan, whose first phase is projected to cost at least US$5.6 billion, could also be spun off, Lassonde says.
“When you look at Pakistan, it may be better off as part of a floated company backed by Middle East money,” he said.
“Maybe Barrick could end up being the operator but with a minority stake so that you don’t have much of any financial exposure.”
Newmont merger?
Although Barrick has been building up its copper portfolio with projects such as Reko Diq, the new CEO could also look at merging with major gold producer Newmont, Tumazos said.
Barrick and Newmont share the distinction of having made leadership changes on the same day. One hour after Barrick announced Bristow’s departure, Newmont issued a press release to say CEO Tom Palmer would retire Dec. 31 and make way for chief operating officer Natascha Viljoen.
A Barrick-Newmont merger “is a possibility,” said Pradier at Veritas. “That’s why it was interesting that the two CEOs left on the same day. I don’t know if the boards are talking.”
The companies are already partners in Nevada Gold Mines, the world’s largest gold mining complex. They also share ownership the Pueblo Viejo operation in the Dominican Republic and Chile’s Norte Abierto property.
Barrick owns 61.5% of Nevada Gold Mines and acts as the operator, while Newmont holds 38.5%. The complex contains nine underground mines, 12 open pit operations, two roaster facilities, two autoclave facilities, 1 flotation mill, two oxide mills, eight heap leach facilities, 14 ranches, two power plants and one warehouse.
Fourmile’s potential
To many observers, another one of Barrick’s Nevada assets is the key prize.
Days before his exit, Bristow held an analyst briefing to present the company’s Fourmile project, which he said has the potential to produce as much as 750,000 oz. of gold per year. That would position it as one of the most significant discoveries of the past 25 years.
“Fourmile is going to be one of the greatest gold mines in Nevada,” Lassonde said. “That asset, if it was in a North American company, would probably be worth the whole value of Barrick today.”
Barrick has said it plans to advance Fourmile over the next few years. It expects to complete a feasibility study around 2029.
Despite Fourmile’s potential, the cost of developing a mine might push Barrick to look for a merger partner such as Newmont, Pradier said.
“The deposit is very deep,” he said. “It’s going to cost a lot of money to do the drilling.”
