Barrick Gold Solid Results Underlie $59 Stock Value

Barrick Gold Corporation (NYSE:ABX) declared robust third quarter earnings a few days back, marked by healthy cash margins of nearly $1,300 per ounce as gold touched new highs during the period. The company is moving aggressively toward developing its planned projects and new discoveries to take advantage of the still-buoyant gold price. Headquartered in Toronto, Barrick is the world’s largest gold mining company and competes with other mining companies such as Newmont Mining (NYSE:NEM), AngloGold Ashanti Ltd. (NYSE:AU), Goldcorp Inc. (NYSE:GG) and Freeport McMoran Copper (NYSE:FCX).

We have revised our price estimate for Barrick Gold to $59, roughly 13 percent above the current market price, to account for year-to-date performance and to reflect our strong near-term outlook for gold.

See our full analysis for Barrick Gold here

Barrick Gold’s stock is in high demand edging higher in the recent weeks. The stock slumped in last September as gold prices fell after touching a high of $1,900. Coupled with the price rise, Barrick’s robust results also boosted the confidence of the investors in the company. The company posted an average cash margin of more than $1,300 on every ounce of gold it sold during the past quarter. The global debt crisis will continue to keep the investor interest alive in the yellow metal, helping it reach new highs in 2012. This reflects higher cash margins for the company going forward.

Copper too has seen good physical demand during the past few days and we expect the demand rising further by the end of the year as the Chinese imports rise. Barrick’s Equinox acquisition points towards the confidence it holds in mining the base metal which faces massive under supply currently.

Buoyant commodity prices and a steady increase in the production levels will continue to drive value for the investors in Barrick Gold.

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