Barrick Mining's Surging AISC a Drag: Time to Reassess the Cost Curve?

Barrick Mining Corporation B is reeling under the effects of rising unit costs. Its cash costs per ounce of gold and all-in-sustaining costs (AISC) — a critical cost metric for miners — increased around 16% and 20% year over year, respectively, in the first quarter. AISC increased due to higher total cash costs per ounce and higher minesite sustaining capital expenditures. Lower production, partly due to the suspension of operations at the Loulo-Gounkoto mine, also contributed to a surge in its unit costs. 

While Barrick remains committed to cost discipline, first-quarter results signal the need for more aggressive cost-containment strategies to maintain competitiveness. For 2025, Barrick projects total cash costs per ounce of $1,050-$1,130 and AISC in the range of $1,460-$1,560 per ounce. These projections suggest a year-over-year increase at the midpoint of the respective ranges. Increased minesite sustaining capital spending and higher labor and energy costs may lead to increased costs. Investors should closely monitor Barrick’s next quarter as persistently elevated unit costs could erode margins and pressure future capital returns. 
  
Among its major peers, Newmont Corporation NEM also saw around 15% year-over-year increase in AISC in the March quarter. Newmont expects gold AISC for the total portfolio to be $1,630 per ounce in 2025, reflecting a rise from $1,516 per ounce in 2024. Newmont, in particular, is stung by higher labor costs, which constitute about half of its direct costs.
 
Agnico Eagle Mines Limited AEM total cash costs per ounce of gold were up modestly from the previous year to $903. While AISC declined 0.6% in the first quarter due to the deferral of certain sustaining capital expenditures, Agnico Eagle projects the same to increase in the remainder of 2025. Agnico Eagle forecasts total cash costs per ounce in the range of $915 to $965 and AISC per ounce between $1,250 and $1,300 for 2025, suggesting a year-over-year increase at the midpoint of the respective ranges.

B’s Price Performance, Valuation & Estimates

Shares of Barrick have popped 31% year to date against the Zacks Mining – Gold industry’s rise of 49%, thanks to the gold price rally.

From a valuation standpoint, B is currently trading at a forward 12-month earnings multiple of 10.75, a roughly 20% discount when stacked up with the industry average of 13.49X. It carries a Value Score of A.

The Zacks Consensus Estimate for B’s 2025 and 2026 earnings implies a year-over-year uptick of 34.1% and 26.6%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

B stock currently carries a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research