Barrick Gold – A STRONG BUY despite these 7 BIG RISKS

Barrick Gold (GOLD) is currently the cheapest of the major gold companies but it comes with some risks.

In this video I’m going to share with you some of the reasons why Barrick is such a great buy in 2024, however I’m also going to share with you some risks that Barrick faces.

Reasons to buy Barrick Gold:
1. It has the best assets of any gold miner
2. It’s trading at some of it’s best valuations ever
3. An incredible growth pipeline ensures significant production increases.
4. A strong balance sheet with no debt. Barrick is a cash flow machine.
5. The assets are more than replacing mined ounces each year.
6. Best management in the business.
7. Very strong margins.

Risks that Barrick faces:
1. Diversified (but significant) political risk.
2. Significant exposure to copper
3. Steadily declining production over the past 16 years.
4. Missed production guidance 3 years in a row.
5. Buying first quantum will lower stock price temporarily.
6. Costs have risen a lot
7. Risks of nationalization are present.

Never make any investment decisions based on my videos. This sector is very risky and this should not be considered investment advice. Always do a lot of your own research before investing your hard earned money.

#gold #goldstocks #barrickgold

I think Beric gold is a very strong buy today in 2024 so in this video I’m going to give you seven reasons why it’s such a good value today but after that I’m actually going to share seven risks with you because if you don’t know enough about a company to know several things

That could go wrong with that company well then you don’t know enough to invest in that company so let’s get right into it by the way don’t take any of this as investment advice these are just my opinions based on my analysis and always do lots of your own research

Before investing any of your hard-earned money number one is that on just about every metric that you could possibly measure baric is super cheap today compared to where it’s been in the past for example the price to cash flow ratio is way below its average and the price

To the net asset value of the company is the lowest it’s ever been but for one single quarter in 2015 it’s trading at about 65 times now the sentiment in the entirety of the gold sector right now is awful which is good news for you the investor who has

Money to invest because that means you can find lots of great values and Beric gold is perhaps the very best value of the majors reason number two are beric’s best inclass assets of the 10 best gold mines in the world Beric owns six of them six of the 10 best which is crazy

That’s way better than any other major out there and speaking of assets the reason number three is that baric has the best growth pipeline of any of the majors well no of any gold company at all they are set to grow a lot without having to buy anything else or make any

Acquisitions over the coming remainder of the decade for example you have the REO project in Pakistan which is absolutely enormous they have something like 50 billion pounds of copper and 40 million ounces of gold there in that project and then you have the huge lamana expansion as well but in addition

To those two growth projects one project you almost never hear analysts talking about when talking about baric is their donland project in Africa no is their donlin project in Alaska this donland project which barones 50% of is one of the biggest well will be one of the

Biggest gold mines in the world so far they found about 40 million ounces but there’s probably 80 to 100 million ounces of gold there and when they get into production that mine should be producing about a million ounces a year so you have a million ounce a year mine

Of which baric owns 50% and it doesn’t even get talked about at all because their assets are so great and their growth pipeline outside of the nonl project is so massive another reason why berck is a strong buy is they have a very strong balance sheet and they have

Zero net debt which for an industry that is so Capital intensive it is actually pretty rare to have zero net debt but barck and a lot of other producers in fairness have no debt at all and on that point they’re generating cash like crazy this is a cash flow machine which has

Allowed them to pay down their debt but that also allows them to pay a nice dividend and invest in growth projects to continue growing the business reason number five to buy baric is that their assets are so good that they keep more than replacing reserves so their reserves despite mining like 4 million

Ounces a year their reserves are actually growing because they keep finding more than they’re mining so when you have such good assets like does that often allows you to do something like that if you spend sufficient money exploring those assets and because of all this exploration success and having

Such good assets it allows them to grow organically without having to go out and make Acquisitions of course every mine will eventually deplete over time you will run out of stuff to mine however a lot of Barrack’s assets have reserves and resources that will allow them Minds

To operate for many decades into the future the sixth reason bar is a strong Buy in 2024 is that they have the best of the best management Mark Bristo is arguably the best CEO in the entire industry since Taking Over Bar he has solved a lot of problems that previous

Managers haven’t been able to solve for example he was able to combine the Nevada assets of baric the Nevada assets of Newmont take them over have baric operate them and and save a bunch of money in synergies and like save in or routing costs and all sorts of stuff

Because there was double money being spent there and they were operating those mines Newmont and baric were for many many years before Mark Bristo took over the company but then within like a year of taking over the company he was able to consolidate that into one company Nevada gold mines which has

Operated and own more than 60% by baric and in addition to that he’s been able to work with community and very difficult to operate places and work with governments in those places to get mines reopened to keep them running to negotiate difficult tax related things and lots of problems that come up in

These developing countries while Mark Bristo has been able to take care of it almost every single time so I’m going to share with you the seventh reason in a moment but after that I’m going to share with you seven risks that come with bber overall I think berck is a really strong

Buy and I think these positives far outweigh the negatives however there are still risks associated with buying this stock a lot of gold investors have been disappointed with the gold price like they expected more out of it but the truth is and this is reason number seven

Why to buy baric is that at these gold and copper prices by the way they do have copper exposure as well at these golden copper prices they have huge margins they’re making like6 $700 an ounce for every single ounce that they mind which is actually really good and

That’s much much better than it’s been for most of the history of the company the first risk with baric is their political risk something about Mark Bristo is he goes where the biggest and best minds are regardless of the political climate he’s able to work with the governments work with the local

Communities to get these mines built and continue operating and getting them reopened if they’ve been shut down down which has happened few times they have operations in places like Mali Congo Tanzania Papu Guinea lots of places that a lot of people are scared to go or as

Rick rule says can’t spell so they definitely aren’t operating in tier one political jurisdictions however you could make the argument that they’re Diversified because they’re operating in so many different risky jurisdictions the second risk is that they have significant exposure to copper and in the coming years they’re going to have

Even more exposure to Copper now I actually think this is a very good thing because I’m very bullish on where the copper price is going to go into the future however if we get some sort of worldwide recession where economic activity is reduced well that’s going to

Kill the copper price which will hurt baric temporarily but you could see a significant decline in baric stock price should we see something like that the third risk with baric is that they’ve missed their production guidance for three years in a row that’s something you never like to see now I think

They’re going to be able to change that and I think in 2024 they’re going to be heading in the right direction again and that’s sort of related to the next risk and that is since 2007 for the last 16 years Barrack’s production has been pretty steadily

Declining year after a year it just goes to show how hard it is to maintain this level of production when you have this big of a company so in 2007 they were producing something like eight million ounces a year now they’re producing 4 million ounces a year in fairness

They’ve sold some assets along the way but still I mean that’s kind of scary to see when you see 16 years basic like there’s been some ups and some downs but overall it’s a pretty steady downtrend with production decreasing over the years now I think we’re going to go into

A phase where Barrack’s going to be increasing production by quite a bit looking at their upcoming Pipeline and what they’re going to be building and what they’re going to be expanding and all that so I think that trend is about to reverse so that could be a good

Reason why the stock is so cheap right now however it is still a risk when you see 16 years of declining production it’s like oh who wants to jump in front of that freight train the next risk for baric is related to the company first Quantum so first Quantum is a copper

Miner and they have a huge asset in Panama called the Cobra Panama copper mine that recently got shut down by the Panamanian government baric is trying to acquire first Quantum while the stock price of First Quantum is way depressed they want to acquire first Quantum to get their copper assets because

Something Mark Bristo the CEO of baric is trying to do he’s trying to build a gigantic copper and gold company well if baric does acquire first Quantum and is successful in that well initially baric stock price is probably going to go down on that acquisition now I think it’s

Going to be very good for baric in the long run if they’re able to acquire that company however it could temporarily reduce the stock price another risk with baric is the risk of nationalization given the political climates that they operate in there’s a lot of these developing country governments that

Occasionally try to nationalize Assets Now sometimes these governments outright nationalize the mines but then other times they do it in a way where they don’t call it nationalization but for example there’s a permit coming up that’s set to be renewed and it’s just a formality if you’ve followed all the environmental guidelines and

Everything however then that comes time to renew it and then they don’t renew it so by the fact that they don’t renew a permit for example well then they’re effectively nationalizing the mine this happened to baric and Papa New Guinea with their P mine a few years back and

Then it took Mark Bristo and baric a while to negotiate with the government and they ended up having to give a bigger share of the mine to the government and you know what that could happen with some of their other mines as well and the seventh risk for Barrack

That I have for you is that their costs have risen a lot over the past 5 years they’re all in sustaining costs have gone from about $800 an ounce to about $1,300 an ounce just in a matter of 5 years and if we continue seeing these massive cost increases like we’ve seen

Over these past 5 years well then that could cut into barrick’s profit margins a lot especially if the gold and copper prices don’t continue climbing but despite all these risks I think baric is still a very strong buy and you cannot go wrong at this kind of valuation if

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