Invest1 publisher3 min readPublished
Barrick paid out $1.50 billion in a quarter that generated $141 million of attributable free cash flow
Newmont will pay $1.95 billion within thirty days and has consented to Barrick's North American listing. The settlement cash arrives at a company whose dividend and buyback outran the quarter's attributable cash flow.
The Investor · Invest desk
What happened
- Newmont will pay Barrick a $1.95 billion cash top-up within thirty days under an agreement that settles all outstanding disputes over the Nevada Gold Mines joint venture.
- Newmont has consented to the IPO of Barrick's North American gold assets, which Barrick says is on track to complete by year end with Mark Hill running the new company after separation.
- Gold production of 796,000 ounces came in above the guided range of 730,000 to 770,000 ounces and 11% above the first quarter, helped by Loulo-Gounkoto, Pueblo Viejo and Cortez.
- Barrick declared a $0.175 quarterly dividend and repurchased $1.2 billion of stock, lifting shareholder returns 242% year on year to $1.50 billion.
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Why it matters
- decision With the partner's consent in hand and the venture disputes closed, the remaining variable on the listing is the price the market offers by December, and Barrick has to decide whether to sell into it.
- exposure A quarterly payout running $380 million ahead of attributable operating cash flow leans on a one-time settlement cheque, so a weaker gold price forces a choice between the balance sheet and the buyback.
- cost Barrick's shareholders stop owning Fourmile outright and own it through Nevada Gold Mines instead, and the compensation for that switch is fixed in cash while the ounces are not.
According to Barrick's second-quarter release, Newmont's money arrives within thirty days [1]. It is 13.8 times the $141 million of attributable free cash flow Barrick generated in the three months to June 30 [11][1]. It is also close to half the midpoint of the $3.8 billion to $4.2 billion of attributable capital spending the company now guides for the full year [12][2].
Barrick's payout was larger than the cash the quarter produced. Shareholder returns of $1.50 billion ran $380 million ahead of attributable operating cash flow of $1.12 billion [13][11][3]. Buybacks were 80% of that total, and the 242% increase from a year earlier implies the same quarter in 2025 returned about $440 million [13][8][4].
What moves the other way is Fourmile, which Barrick vends into Nevada Gold Mines early. Newmont vends Mike and Fiberline on the same schedule, and Barrick puts the combined complex at close to 100 million ounces [2]. Newmont's payment is described as a top-up [1]. If that word carries its usual meaning between joint venture partners, the two sides priced their contributions and Newmont's came up $1.95 billion short. The release does not value either package or restate the ownership split in the venture [17].
Mark Hill becomes chief executive of the North American company on separation [5]. He said: "We achieved an historic agreement with Newmont." [14] He also said: "We are excited to launch a pure play gold company with high-quality, long-life assets exclusively in low-risk jurisdictions." [15] Barrick says the consent provides "great structural flexibility and value" [16].
On costs, gold cost of sales was $1,993 an ounce against all-in sustaining costs of $1,866, a difference of $127 between the two measures [8][5]. Barrick says both stayed within guidance despite fuel price pressures [8]. The beat on output was 26,000 ounces above the top of the guided range [6][6].
The listing could price those North American ounces above what the market credited them inside Barrick. Then the consent was the valuable half of the deal and the cash is the smaller part. If it prices below, the $1.95 billion was the substance and the IPO is a structure. Gold could also retrace, and then a $1.50 billion quarterly payout part-funded by a one-time settlement becomes a choice between the balance sheet and the buyback.
I would expect the payout to hold at least through the listing. Barrick left production and cost guidance alone while cutting attributable capital spending [12], and a smaller capital budget on unchanged output is what funds returns. The test is the third quarter. If attributable free cash flow covers $1.50 billion of returns without help from Newmont's payment, the funding argument here is wrong; in the second quarter it covered 9% of them [7].
What to watch
- Third quarter results: whether attributable free cash flow covers the payout without the $1.95 billion, and whether buybacks stay near $1.2 billion.
- The IPO prospectus for the North American company: pricing, free float, and how much of it Barrick retains.
- Confirmation that the $1.95 billion has been received inside the thirty days, and where it lands - debt, capital spending or repurchases.