The ongoing drama between Canadian gold stock Barrick Gold (TSE:ABX) and the Malian government is, apparently, still ongoing. Though Mali is reportedly welcoming Barrick Gold back to the country, it seems that Barrick Gold itself might not be so sure about that. Investors, though, are looking forward to seeing something come out of the country, as they sent shares up nearly 2% in Monday morning’s trading.
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The Malian government reopened the Barrick Gold offices in the capital, Bamako, after closing them down back in April over “alleged non-payment of taxes,” a Reuters report noted. This proved to be an unexpected twist in an increasingly tortuous story. About a week ago, courts in Mali placed the Loulo-Gounkoto mine under the government’s control, as the ongoing fight between the two entities kept going in earnest.
Oddly, Mali then put Soumana Makadji in charge as “provisional administrator,” a move that Barrick Gold vowed to appeal. Makadji is the former health minister of Mali, thus putting him in charge of a gold mine is kind of like sending a plumber out to fix your computer. However, in a move that perhaps illustrates why the former health minister was sent out to take over the mine, Makadji is likely to restart operations at the mine directly, and will be proceeding out to the site before the week is out.
Oh, That’s Why
So some might wonder here why Barrick Gold would even want to go back to a place where they seized three metric tons of the company’s produce in a dispute over back taxes. As it turns out, there is a very good reason: gold. But not just gold by itself; it turns out that gold may have saved the Canadian stock market.
Most of use know by now about the tariffs and the trade war that is still ongoing to this day. And with a 90-day tariff reprieve set to expire on July 9, there are already investors looking to the future. But the Canadian stock market managed to weather the blows from tariffs and the Liberation Day announcement surprisingly well, thanks in large part to the combined forces of bank stocks—which moved to get ahead of delinquencies—and gold miners like Barrick. A rally in gold prices that sent gold to $3,400 an ounce, up around 30% to date, gave gold stocks a boost. And with gold stocks making up around 8.9% of the S&P / TSX composite index, reports note, that underscored how important Barrick Gold is to the Canadian economy as a whole.
Is Barrick Gold a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:ABX stock based on seven Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 26.11% rally in its share price over the past year, the average TSE:ABX price target of C$34.73 per share implies 18.29% upside potential.
