Barrick Gold Corporation GOLD has inked an earn-in agreement with Golden Minerals Company AUMN. Under the deal, Barrick has acquired an option to earn a 70% stake in Golden Minerals’ El Quevar project, which is situated in the Salta Province of Argentina.
Further, Barrick will purchase $1million of Golden Minerals’ shares at 21 cents per share. Notably, the shares will be subject to applicable restrictions on transfer under the U.S. and Canadian security laws.
In order to earn a 70% stake in the El Quevar project, Barrick has to spend $10 million on exploration activities, which must be incurred over a period of eight years. Additionally, it needs to deliver a Pre-Feasibility Study (“PFS”) describing a potentially profitable project with mineral resources of not less than two million gold equivalent ounces by the end of the eighth year. Also, it must deliver a written notice of exercise to Golden Minerals within eight years.
Barrick has the right to withdraw from the deal upon spending $1 million in work expenditures by providing a 30-day notice.
The El Quevar properties are expected to be held by a new entity, named NewCo. Upon earn-in, Barrick will have a 70% ownership in NewCo, while the rest 30% will be owned by Golden Minerals.
Barrick’s shares have gained 83.8% in the past year compared with the industry’s 54.7% rise.
In February, the company said that it expects attributable gold production of 4.8-5.2 million ounces at an all-in sustaining cost (AISC) of $920-$970 per ounce for 2020. The cost of sales is expected in the range of $980-$1,030 per ounce.
The company expects copper production of 440-500 million pounds at AISC of $2.20-$2.50 per pound and at the cost of sales of $2.10-$2.40 per pound.
Barrick Gold Corporation Price and Consensus
Barrick Gold Corporation price-consensus-chart | Barrick Gold Corporation Quote
Zacks Rank & Other Stocks to Consider
Barrick currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Kinross Gold Corporation KGC and Franco-Nevada Corporation FNV.
Kinross has a projected earnings growth rate of 41.2% for 2020. The company’s shares have surged 77.5% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada has a projected earnings growth rate of 15.9% for 2020. It currently carries a Zacks Rank #2. The company’s shares have rallied 69.1% in a year.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
Golden Minerals Company (AUMN) : Free Stock Analysis Report
To read this article on Zacks.com click here.