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Barrick Gold Closes Strategic Investment in Midas Gold


Barrick Gold Corporation ABX has purchased 46,551,731 common shares of Midas Gold Corp. for gross proceeds of roughly $38.1 million in a non-brokered private placement. As a result, Barrick Gold now owns 19.9% of issued and outstanding shares in Midas Gold.

Barrick Gold’s latest move supports the continued efforts of Midas Gold to complete a feasibility study and permitting of the Stibnite Gold Project in Idaho. Earlier this month, Barrick Gold stated that the Stibnite Gold project has low geopolitical risk. It also has the potential to produce more than 300,000 ounces of gold per annum at competitive operating costs and exploration upside.

Barrick’s shares have inched up 0.1% in the past three months, outperforming the 2.4% decline recorded by its industry.

Barrick Gold recorded net earnings (attributable to equity holders) of $158 million or 14 cents per share for first-quarter 2018 compared with $679 million or 58 cents a year ago. Adjusted net earnings of 15 cents per share for the quarter came in line with the Zacks Consensus Estimate.

Revenues fell roughly 10.2% year over year to $1,790 million in the first quarter. The figure however, beat the Zacks Consensus Estimate of $1,764.9 million.

The company expects gold production in the second quarter of 2018 to be more or less in line with the first quarter at around 1 million ounces. Second-quarter results are likely to be negatively impacted by a scheduled maintenance shutdown at the Barrick Nevada roaster.

Zacks Rank & Stocks to Consider

Barrick Gold currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include The Chemours Company CC, Westlake Chemical Corporation WLK and Huntsman Corporation HUN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained 22.3% in a year.

Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 96.2% in a year.

Huntsman has an expected long-term earnings growth rate of 8.3%. Its shares have moved up 26.6% in a year.

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