Barrick Gold Corporation (GOLD, Financial) has finalized an agreement to divest its 50% stake in the Donlin Gold Project in Alaska. This asset, held through its subsidiary Barrick Gold U.S. Inc., will be sold to affiliates of Paulson Advisers and NOVAGOLD Resources (NG) for a total of $1 billion in cash.
The agreement also allows NOVAGOLD an option to purchase the remaining debt linked to the project from Barrick. NOVAGOLD can buy this debt for $90 million if the purchase is made before the deal's closing. Alternatively, if the debt is acquired within 18 months post-closing, the price will rise to $100 million. Failure to exercise this option will result in the debt remaining under its current terms.
Paulson Advisers and NOVAGOLD will acquire an 80% and 20% share, respectively, in Donlin Gold LLC, which controls the project. Both parties will contribute proportionately to the purchase price, while several existing shareholders, including Paulson, will support NOVAGOLD's financial commitment.
The proceeds from this sale will be utilized by Barrick to enhance its financial stability, invest in future endeavors, and ensure returns to shareholders. The transaction is anticipated to close by late in the second quarter or early in the third quarter of 2025, subject to customary closing conditions and necessary regulatory approvals.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for Barrick Gold Corp (GOLD, Financial) is $23.81 with a high estimate of $31.50 and a low estimate of $19.00. The average target implies an upside of 16.45% from the current price of $20.45. More detailed estimate data can be found on the Barrick Gold Corp (GOLD) Forecast page.
Based on the consensus recommendation from 16 brokerage firms, Barrick Gold Corp's (GOLD, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Barrick Gold Corp (GOLD, Financial) in one year is $22.29, suggesting a upside of 9% from the current price of $20.45. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Barrick Gold Corp (GOLD) Summary page.
