Barrick Misses Q2 Profit Estimate as Costs Rise and Newmont Deal Clears IPO Path

Barrick Mining’s second-quarter earnings came in below Wall Street expectations even as higher gold prices pushed revenue and profit sharply above year-earlier levels, with rising fuel, royalty and operating costs absorbing part of the benefit from stronger bullion prices.

The miner reported adjusted earnings of 82 cents a share for the three months ended June 30, below the 88 cents a share expected by analysts surveyed by LSEG. Net earnings attributable to shareholders rose 50% from a year earlier to $1.22 billion, while adjusted net earnings increased 70% to $1.36 billion. Revenue climbed 44% to $5.29 billion.

Barrick’s U.S.-listed shares fell nearly 6% in premarket trading after the results and the announcement of a sweeping agreement with Newmont over Nevada Gold Mines. The market reaction came despite a quarter in which Barrick exceeded its own gold-production guidance and maintained its full-year production and cost outlook.

Gold production reached 796,000 ounces, up 11% from the first quarter and slightly below the 797,000 ounces produced a year earlier. Barrick had guided to second-quarter production of 730,000 to 770,000 ounces, so the operating result came in above the top of its expected range. The improvement from the first quarter reflected the faster restart of Loulo-Gounkoto, a quicker recovery at Pueblo Viejo after planned maintenance and record underground tonnes at Cortez as the Goldrush operation continued to ramp up.

The problem was that each ounce became more expensive to produce. Barrick’s gold cost of sales rose 20% year over year to $1,993 an ounce. Total cash costs increased 15% to $1,426 an ounce, while all-in sustaining costs, a broader measure that includes the spending required to sustain production, increased 11% to $1,866 an ounce.

The company attributed the increase to lower grades at Carlin, Cortez and North Mara, higher fuel expenses across its operations and royalties that increased as the price of gold rose. Energy costs have become a broader concern for the mining industry as disruptions to oil flows linked to the conflict involving Iran have kept fuel prices elevated.

Barrick’s realized gold price averaged $4,417 an ounce, 34% above the $3,295 it realized in the second quarter of 2025. The price increase was large enough to generate substantial year-over-year earnings growth even with higher costs, but it did not prevent adjusted profit from falling short of market expectations.

There was also a meaningful sequential slowdown. Barrick had earned adjusted profit of 98 cents a share in the first quarter, when its realized gold price averaged $4,823 an ounce. Second-quarter adjusted earnings fell to 82 cents as the realized gold price declined 8% from the previous quarter and AISC increased 9%.

Cash generation showed a similar pattern. Operating cash flow was $1.70 billion, up 28% from a year earlier but down from $2.55 billion in the first quarter. Attributable free cash flow fell to $141 million, compared with $1.21 billion in the first quarter and $212 million a year earlier. Capital spending increased as Barrick advanced several development projects, including Fourmile and the Lumwana expansion.

Higher costs have not forced Barrick to cut its gold outlook

The increase in mining costs is important, but Barrick is not yet signaling that the pressure has pushed its operating plan off course.

The company maintained its full-year gold production forecast of 2.90 million to 3.25 million ounces. It also left gold cost guidance unchanged, including all-in sustaining costs of $1,760 to $1,950 an ounce. The second quarter’s $1,866 AISC therefore remained within the range Barrick expects for the year even though it was considerably higher than a year earlier.

Barrick’s cost assumptions are based on a West Texas Intermediate oil price of $70 a barrel. The company estimates that every $10-a-barrel move in oil changes direct diesel-related costs across its gold operations by about $12 an ounce. That sensitivity makes energy prices a more material variable for the second half if oil remains above the level incorporated into Barrick’s budget.

The company actually reduced its expected attributable capital expenditure for 2026 to $3.8 billion to $4.2 billion, down from a previous range of $4.0 billion to $4.45 billion, primarily because of lower planned spending at the Reko Diq copper and gold project.

Barrick’s copper business also benefited from higher metal prices while facing substantial cost inflation. Copper production was 56,000 tonnes, down 5% from a year earlier, while the realized copper price rose 41% to $6.15 a pound. Copper all-in sustaining costs increased 36% to $3.95 a pound.

Those numbers make Barrick’s current earnings picture more complicated than a simple profit miss. Gold and copper prices are producing much higher revenue and earnings than a year ago, while operating costs are consuming a larger share of those gains. At the same time, Barrick is spending on projects that it expects to drive future production and is preparing to reorganize some of its most valuable assets into a separately traded North American company.

That second story may ultimately prove more consequential than the six-cent earnings miss.

The Newmont agreement removes a major source of uncertainty around the IPO

Barrick and Newmont used the earnings day to announce an agreement that resolves their outstanding disputes over Nevada Gold Mines and gives Newmont’s consent to Barrick’s proposed IPO of its North American gold business.

Under the agreement, Newmont will pay Barrick $1.95 billion in cash within 30 days. Barrick will contribute its Fourmile project to Nevada Gold Mines earlier than previously contemplated, while Newmont will contribute the Mike and Fiberline projects. Barrick said the combined additions would help create a Nevada gold complex containing nearly 100 million ounces of gold.

The arrangement is significant because Fourmile, Mike and Fiberline were deliberately left outside Nevada Gold Mines when Barrick and Newmont created the joint venture in 2019. At the time, the companies agreed to combine most of their Nevada operations but excluded those projects while their commercial potential was still being evaluated.

Nevada Gold Mines is 61.5% owned and operated by Barrick, with Newmont holding the remaining 38.5%. It combines mines and processing facilities across northern Nevada, including the Carlin, Cortez and Turquoise Ridge districts, and Barrick describes it as the world’s largest integrated gold-producing complex.

The relationship between the two companies had become increasingly important to Barrick’s IPO plans.

In February, Newmont publicly warned that any transaction involving the joint ventures would have to respect transfer restrictions and other protections contained in the existing agreements. Newmont also criticized the operating performance of Nevada Gold Mines, saying the venture had experienced a deterioration in performance and asset value over the previous six years.

Barrick maintained that it could proceed with the IPO while complying with its agreements, but the two companies continued discussions over Nevada Gold Mines, the IPO and the timing of Fourmile’s eventual contribution to the joint venture.

Monday’s agreement removes much of that uncertainty. Newmont has now explicitly consented to the IPO, the companies have agreed on the treatment of the three excluded Nevada projects and Barrick says all outstanding Nevada Gold Mines disputes have been resolved.

For Barrick, that provides greater flexibility in structuring the new company. The planned entity is expected to include Barrick’s interest in and operatorship of Nevada Gold Mines, its stake in Pueblo Viejo in the Dominican Republic, Fourmile, other North American exploration properties and the projects contributed by Newmont.

Barrick still expects to complete the IPO by the end of 2026, subject to market conditions, regulatory approvals and other customary requirements.

Fourmile is central to what Barrick is trying to unlock

The treatment of Fourmile matters because Barrick sees the Nevada discovery as one of the most important sources of future growth in its portfolio.

Fourmile sits adjacent to Nevada Gold Mines and was wholly owned by Barrick before the newly announced agreement. The company has described it as potentially capable of becoming a standalone Tier One gold asset and one of the most important gold discoveries of this century, although parts of its longer-term exploration potential remain conceptual and subject to further drilling and economic studies.

Barrick continued accelerating development during the second quarter. It awarded the Bullion Hill decline contract to Barminco, secured key infrastructure contracts and expects underground decline development to begin during the third quarter. Twenty drilling rigs were operating at the site as Barrick works toward a prefeasibility study targeted for completion in 2028.

The company’s earlier plan already contemplated eventually contributing Fourmile to Nevada Gold Mines at fair market value once certain criteria were met. The new agreement accelerates that process and resolves how Newmont will be compensated within the broader joint-venture structure.

Newmont’s contribution of Mike and Fiberline also brings two projects that were excluded from the original 2019 joint venture into the same operating structure. That gives Nevada Gold Mines a larger combined development pipeline at a time when Barrick is trying to present the North American business to public investors as a focused collection of long-life gold assets rather than simply a carve-out of existing mines.

Barrick said in April that the North American company would contain four Tier One assets: Carlin, Cortez and Turquoise Ridge within Nevada Gold Mines, plus Pueblo Viejo. Those assets produced about 2 million attributable ounces of gold in 2025. Barrick intends to retain a significant controlling interest after selling only a minority stake to public investors.

The company has been planning a primary listing in New York with a secondary listing in Toronto. Mark Hill, currently Barrick’s president and chief executive, is expected to become chief executive of the North American company when the separation takes place.

That means Barrick is not proposing to sell its North American operations outright. The intended structure would create a separately valued public company while allowing Barrick shareholders to retain economic exposure through Barrick’s controlling ownership.

The strategy is meant to address a persistent valuation question around diversified miners. Barrick’s portfolio includes mature North American gold mines, major development projects, copper assets and operations across several regions with very different political and operating risks. Creating a separately traded North American company would allow the market to value a more geographically concentrated gold business independently from the remainder of Barrick.

Whether investors ultimately assign a higher valuation to that company will depend on the IPO terms, the percentage sold, operating performance and the valuation at which the shares are offered. Those details have not yet been finalized publicly.

Barrick is returning cash even as development spending rises

Barrick’s capital allocation provides another backdrop to the IPO. The company spent $1.21 billion repurchasing its own shares during the second quarter under the $3 billion buyback authorization announced in May. Together with its quarterly dividend, Barrick said shareholder returns reached about $1.50 billion during the period, up 242% from a year earlier.

Barrick declared another quarterly dividend of 17.5 cents a share, payable September 15 to shareholders of record on August 31. Its dividend framework targets an annualized payout equal to 50% of attributable free cash flow, consisting of a fixed base dividend and a potential year-end performance component.

The balance sheet gives the company room to manage those competing uses of capital. Barrick ended June with $5.93 billion in cash and equivalents against $4.68 billion of debt, leaving it in a net cash position.

The $1.95 billion cash payment from Newmont would add another substantial source of liquidity once received, though Barrick has not committed in its second-quarter release to a specific use for the proceeds.

That leaves investors evaluating two different sides of the quarter.

Operationally, higher gold prices are producing much stronger revenue and earnings than a year ago, but rising mining costs and lower grades are limiting some of that benefit. Strategically, the Newmont settlement removes an obstacle that had complicated Barrick’s attempt to separate and independently value its North American assets.

The next major milestone is no longer whether Newmont will consent to the transaction. It is whether Barrick can complete the North American IPO on the terms and timetable it has outlined, with the company still targeting a launch by the end of 2026.

Sources

Barrick Mining, Q2 2026 Results Presentation: production, costs, earnings, guidance, Newmont agreement, IPO structure and buybacks.