Barrick Gold is a publicly traded mining corporation. While individual investors can't buy the precious metals that they mine, you can invest in company stock. But is Barrick Gold worth investing in? Does it have potential for growth? And perhaps most importantly, does the business operate with enough transparency for investors?
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About Barrick Gold
Barrick Gold is a Canada-based mining corporation that operates projects in 13 different countries. It is publicly traded on the Toronto Stock Exchange, London Stock Exchange, and New York Stock Exchange. With almost 40 years of experience, this company has grown by strategically partnering with and acquiring its biggest competitors.
Today, Barrick Gold is the second-largest mining company for gold in the world. There was a period of time when it was the largest. But when Newmont Corporation and Goldcorp fused in 2019, that created a pseudo-monopoly that eclipsed even Barrick's massive reach.
According to the company, they have strong policies of partnering with the communities that they work in. Their goal is to help enhance the economies and lives of those who work in and around the mines. They say that they want to help these countries and groups to partake in the tangible benefits of precious metals.
The company's mining operations span regions including North America, South America, Papua New Guinea, Saudi Arabia, and Africa. They have built a portfolio of mining operations in some of the most gold-rich areas of the world. Their goal is to acquire and develop projects with long lifespans to ensure that they have the most room for growth.
One of the biggest concerns that investors have with mining companies and the natural resources industry is the environmental impact. Gold and other precious metals are not renewable resources. There is also concern about the potential for mining projects to disrupt the ecosystems around the projects.
Barrick Gold has developed a robust sustainability policy in order to address the concerns of investors. They say that their goal is to create value and growth over time for shareholders. To do that, they take social and environmental considerations into account when making business decisions.
That's a wise choice, as poor environmental optics can tank a company's stock price. Environmental sustainability isn't just an ethical stance, it's a necessary component of any successful business plan.
Economic and Social Development
Preserving the environment is just a fraction of Barrick Gold's sustainability policy. They also have governance regarding how they impact the local communities around their mines. Their goal is to help their host communities to become empowered through further economic and social development.
It is important to have a good relationship with the communities around your project if you want to operate ethically. The social aspect of the business is also important for sustainability in the long term.
To make sure that economic and social development is being prioritized, Barrick Gold works according to three key principles.
The first principle is rooted in partnership. Every project is undertaken as a partnership with the surrounding local community. Barrick Gold works hard to make sure that their mining operations are mutually beneficial to both their stakeholders and the locals.
The second principle is sharing. Barrick Gold participates in the local economies around their mining projects. They hire local community members and try to purchase supplies from local stores. This helps to jumpstart the economy and elevate the community. And the more the community thrives, the more opportunity there will be in the future.
The third principle is centered on the stakeholders. Every person who owns Barrick Gold stock gets a say in what the company does. The company wants to give stakeholders a high return on investment and operate with their confidence. In keeping with this, they listen to stakeholders and adjust their approach based on what the stakeholders want.
Health and Safety
Mining is famous for being a dangerous profession. But in today's modern world, it shouldn't have to be. Barrick Gold works to ensure that miners have their health and safety prioritized above everything else.
Barrick Gold takes occupational health and safety into account. This concept is incredibly important for sustainable development, at least according to the World Health Organization. While the US has the Occupational Health and Safety Administration, the compliance regulations globally will vary widely depending on the country.
Regardless of the government regulations on any given project, Barrick Gold prioritizes people's health and safety. There are rigorous safety standards put in place to reduce the risks of injury. By its nature, mining comes with a variety of potentially hazardous situations, including:
Barrick Gold's safety protocols are meant to keep people safe and prevent expensive equipment from becoming damaged. They measure how well the safety protocols are working based on whether there is a decrease in reported accidents around the workplace.
The 2020 economic year was a good one for health and safety standards. Some of the highlights included:
Human rights make up a core part of Barrick Gold's sustainability policy. They have done robust research and analytics on how they impact the social fabric of their mining communities.
Mining companies are infamous for being the face of human rights abuses. Rather than trying to cover that up, Barrick Gold openly acknowledges it. They say that their industry has the potential to have a harmful impact, and that they have a responsibility to make sure that they are operating ethically.
This intersects somewhat with the social and economic development of communities. Barrick Gold wants to improve the lives of their workers rather than harming them.
During the 2020 fiscal year, Barrick Gold achieved these things in their ongoing goal to promote human rights:
Though most people think of the environmental impact first when they think about mining companies, environmental considerations are just one piece of sustainability. Barrick Gold makes an effort to manage its environmental impact to keep the world safe for current communities and future ones.
One of their biggest focuses is on environmental stewardship. They believe it is important to acknowledge that any mining operation will affect the environment, no matter how many standards are put in place. If they acknowledge this, they can then take steps to minimize their impacts.
Being responsible with the environment is also important for risk management. The more careful and cautious an operator is, the lower the chances of serious mishaps. It's important for Barrick Gold to evaluate all potential environmental risks and work with an awareness of their impact.
Every mining site involves high environmental standards on a managerial level. The company has an Environmental Policy that governs the rules for every mine. Each site develops a unique Environmental Management System based on its unique risks and needs.
These systems undergo an annual review and update. Every site manager must work together to make sure that the management system is properly implemented. There are employees specifically hired to work as environmental managers. The general managers are responsible for making sure all other workers comply with the standards.
Is Barrick Gold a Scam?
Barrick Gold is not a scam. In fact, it is one of the largest mining corporations in the world. There are active operations across multiple continents. The company is traded on multiple global stock exchanges, and it has repeatedly met or exceeded its quarterly projections.
Since the stocks are traded publicly, there is a great deal of published financial information about the company. Investors can learn about exactly where and how money was spent, how executives are compensated, and how the mining operations are predicted to perform in the future.
But the question of whether you should buy the stock is another story. You'll need to give it some thought.
As one of the biggest mining companies on the planet, Barrick Gold is less likely to deal with economic fallout from one flawed project. The company has been in operation for so long and managed so well that it seems unlikely that your stocks would tank. That's especially true considering that precious metals companies thrive in situations that make most stocks fail.
However, you also have to consider the potential for growth. Since Barrick is such a massive corporation, there's not as much room to move upward. The best time to invest would have been a few decades ago, back before they had merged with so many competitors. If you buy now, the dividends won't give you enough profit to offset the lack of growth.
Of course, there's no way to guarantee what a stock will do. Unforeseen market circumstances can cause serious surprises. It's possible that Barrick will grow more, and it's also possible that it will lose some of its value as the global economy continues stabilizing post-COVID.
All in all, if you want to purchase stock in a mining company, this is a stable and transparent option. But it is also an expensive option that might not have the potential for growth that smaller players in the industry do.
Pros & Cons of Barrick Gold
Barrick Gold is one of the most successful mining companies in the world. It has grown enormously since it began back in 1973. Today, it is traded publicly on multiple global exchanges. With mining operations all over the globe, Barrick extracts hundreds of thousands of precious metals on an annual basis.
There's no denying that this company has been well-managed and successful. During the 2021 fiscal year, they managed to surpass all of their financial targets for every quarter. There are constant long-term plans being made for new mining operations, so that the company can continue growing when the current mines dry up.
Barrick has acquired and merged with many of its top competitors over the years. The result is a company that's far bigger than any single mining operation. Since it makes up such a large percentage of the global mining economy, it may not have as much room for growth as a smaller company.
But it has been a stable stock offering. For those who want to invest in the precious metals industry, but who also want an asset that pays dividends, it makes sense to purchase stock in a mining company. Thanks to Barrick's multiple worldwide projects, they have a hedge against issues with any one mine.
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