Argentina's environmental ministry asked for Barrick Gold’s (ABX, Financial) temporary cessation of all operations at the Veladero mine, Reuters.com reported April 7, because of the breakage of a pipe carrying the cyanide solution that is spread over the heap’s surface to leach the precious metal on March 28.
Barrick Gold needs to prepare a new working plan for Veladero mine and file with the Argentinian authorities if it wants to continue its business in the San Juan Province, said the energy minister of the Argentinian government following a meeting between Argentinian officials and the world’s biggest gold producer’s executives April 6.
Waiting for the federal court's decision on the request, Barrick Gold has been restricted in the usage of the solution quantity that can be added to the Veladero mine’s heap leach.
Should the court decide to halt Barrick Gold’s operations at Veladero, it may impinge the Canadian miner’s production: the Argentinian open pit mine is one of the mining company’s five core assets and with its production, Barrick Gold expects to counterbalance decreases at Goldstrike and Pueblo Viejo.
Barrick Gold closed at $19.31 per share April 7, down 14 cents or 0.73%, with a volume of 12,943,215 shares traded on the New York Stock Exchange versus an average volume of 8.5 million shares traded over the last 10 trading days and an average volume of 15.22 million shares traded over the last three months.
Barrick Gold is uptrending and gained 17% year to date outperforming the VanEck Vectors Gold Miners ETF (GDX, Financial) with 5%.
The gold stock has a price-sales (P/S) ratio of 2.66 and a price-book (P/B) ratio of 2.81. The EV/EBITDA ratio is 6.69. The recommendation rating is 2.5, and the analysts’ average target price is $21.05 per share.
During the last quarter of 2016, Joel Greenblatt (Trades, Portfolio) opened a position in Barrick Gold, buying 495,851 shares.
John Rogers (Trades, Portfolio) increased his position in Barrick Gold by 26.53%, while First Eagle Investment (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) decreased their positions by 0.55% and 2.92%.
George Soros (Trades, Portfolio) and Ron Baron (Trades, Portfolio) sold out.
Disclosure: I have no positions in Barrick Gold.
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