Barrick Gold in the crosshairs of activist fund Elliott
The fund would be among the top ten shareholders, with a stake of at least USD 700 million. The aim could be to encourage the demerger of the gold giant into two companies, one focused on North America
Barrick Gold came into the sights of Elliott Investment Management, which reportedly bought a 'significant' stake worth at least $700 million, making it one of the top ten shareholders in the Canadian gold company, one of the world's largest.
For the moment, these are only rumours, reported by the Financial Times: in addition to the size of the stake, the objectives of the activist fund are not even known. The most plausible theory, however, is that Elliott wants to push the management to concretise a reorganisation project that would actually turn back the clock, to 2019 to be precise, when the Canadian group acquired Randgold.
The plan - which, according to Reuters sources, has already been discussed by Barrick's board of directors - would entail splitting the group into two separate companies: one focused on North American activities, the most profitable and promising, and a second into which the rest of the portfolio would be conferred, largely inherited from Randgold, creating a sort of 'bad company' given that many operations are located in high-risk countries and some have already encountered serious difficulties. The most egregious case concerns Mali, where the military junta, over a tax dispute, has commandeered the Loulo-Gounkoto complex, seizing gold stocks, halting exports and forcing Barrick to make a billion-dollar write-down.
According to Reuters, the group would now like to sell both the project in Mali and the Pakistani Reko Diq (gold and copper) mine, which is located in the separatist province of Balochistan. Barrick is also active in Congo and Papua New Guinea, other unstable areas. On the other hand, operations in North America are not only 'safer', but are giving great satisfaction, especially in the United States, where, as part of the Fourmile project in Nevada, Barrick has identified a deposit that it describes as one of the biggest discoveries of the century, with a potential production of 750,000 ounces of gold per year. North America, interim CEO Mark Hill confirmed, is 'our next growth area, the one we intend to focus on in the future'.
Hill temporarily took the helm of Barrick Gold, following the sudden resignation of Mark Bristow, who stepped down in September with immediate effect and without providing any official explanation. A sign of the group's vulnerability that may have encouraged the Elliott fund to step in.
