Barrick Unlocks Value From Hemlo Sale: Will It Support Capital Plans?

Core Insights - Barrick Mining Corporation has agreed to sell its Hemlo Gold Mine in Canada to Carcetti Capital Corp for gross proceeds of up to $1.09 billion, including $875 million in cash [1][9] - The divestment is expected to conclude within the fourth quarter of 2025 and aims to strengthen Barrick's balance sheet and return capital to shareholders [1][4] Company Operations - Hemlo has been operated by Barrick for over three decades, producing more than 21 million ounces of gold, with 143,000 ounces produced last year [2] - This sale marks Barrick's exit from its last operating mine in Canada, a significant region for the company, which plans to pursue new opportunities through early-stage projects and exploration targets in the country [2] Strategic Focus - Barrick has divested several non-core assets to concentrate on Tier 1 assets, including the sale of its 50% interest in the Donlin Gold Project in June 2025 and the Alturas Project in Chile, expected to close in the third quarter of 2025 [3] - Combined with the sales of Donlin and Alturas, Barrick anticipates generating over $2 billion from non-core asset divestments this year, supporting its capital allocation strategy [4] Industry Context - Among Barrick's peers, Newmont Corporation completed its non-core divestiture program in April 2025, expecting to generate $3 billion in after-tax cash proceeds from its divestiture program [5] - Kinross Gold Corporation also streamlined its portfolio through the sale of its Russian assets and other operations, resulting in a strong production profile anchored by its major assets [6] Financial Performance - Barrick's shares have gained 87.3% year to date, compared to a 101.6% rise in the Zacks Mining – Gold industry, driven by a rally in gold prices [7] - The Zacks Consensus Estimate for Barrick's earnings in 2025 and 2026 implies year-over-year increases of 56.4% and 21.8%, respectively, with EPS estimates trending higher over the past 60 days [10] Valuation Metrics - Barrick is currently trading at a forward 12-month earnings multiple of 12.81, which is approximately 17.8% lower than the industry average of 15.59 [11]