Gold perhaps has the oldest history in investment, and rightly so. This yellow metal has comparatively low volatility and is comparatively more secure than other investment avenues.
In that regard, it’s no surprise that gold miners such as Barrick Gold (TSX: ABX) are popular choices among long-term investors. Those seeking exposure to gold prices get amplified exposure via investing in these higher-risk securities. Additionally, the publicly traded nature of most gold miners means greater liquidity, which is beneficial for those who may need access to capital in the near term.
Canada is well known for its natural resources, and gold is one of the rich contributors. For those looking to diversify into gold miners, let’s discuss if Barrick Gold meets the test right now.
New discovery changing the game for Barrick Gold
Barrick Gold’s Tongon mine in Ivory Coast was originally scheduled to close in 2020. However, the discovery of new deposits has extended its lifespan to at least 2030. The mine, which is located north of the port city of Abidjan, is the country’s largest industrial mine.
It began production in 2010 and was expected to close due to the depletion of its reserves. However, the discovery of four new pits around the mine and a significant deposit in the nearby region of Boundiali has boosted output and extended the mine’s life.
If this mine’s deposits prove to be profitable, Barrick Gold’s growth profile may be significantly enhanced by this news.
Exploration success continues
Despite being originally scheduled to close in 2020, Barrick’s Tongon gold mine continues to operate thanks to new discoveries made through exploration campaigns.
Hilaire Diarra, general manager of the Tongon gold mine, said at a media briefing that the mine has contributed $2.2 billion to the Ivorian economy since it first poured gold in 2010. This contribution has come in the form of infrastructure development, salaries, taxes, and payments to local suppliers.
Barrick has been granted a new exploration permit for the Boundiali region, and drilling is underway at the Fonondara conversion project.
Bottom line
Keeping in mind the prospects of the company and looking at its decent fundamentals, investors might consider adding this stock to their portfolios. Notably, Barrick’s long-term financials are at par with future market price movements. Thus, this is a fairly valued gold stock that appears to be well positioned for big potential growth over time.
Additionally, ABX stock provides a rather robust dividend yield of 2.3%. This stock has also notably paid dividends over the past decade. Thus, its distributions are safer than many of its peers as well. So, for those looking for a mix of growth and income, Barrick Gold remains a top pick.
