Barrick Gold Corporation (GOLD) shares are moving higher Tuesday after reports surfaced that activist investor Elliott Management has been quietly building a significant position in the mining giant.
The Big Picture
According to the Financial Times, Elliott now holds enough shares to rank among Barrick's 10 largest investors, which means the stake is worth at least $700 million. That's not exactly pocket change, and it comes at an interesting moment for the company.
Barrick has been in transition mode since former CEO Mark Bristow suddenly departed in September. Since then, the company has been working to shift its focus back toward North American operations, and Elliott apparently likes what it's hearing.
The Financial Times reported that Elliott has been encouraged by internal discussions around a potential breakup of Barrick. The idea would be to separate the company's higher-growth North American mines from its operations in Asia and Africa. Barrick's board has reportedly explored selling off its African and Pakistan assets as part of this strategic rethink.
Why This Matters
Barrick shares climbed nearly 3% in pre-market trading when the Elliott news broke, though the stock pulled back somewhat during regular hours. The company has underperformed its rivals even as gold prices have surged, and it's dealt with operational headaches including losing control of a mine in Mali.
Interim CEO Mark Hill recently highlighted what he called a "big opportunity" in strengthening Barrick's North American business, specifically pointing to Nevada as the company's "next big growth area."
Price Action: Barrick shares were trading 1.51% higher at $37.51 at the time of writing.
