NEW YORK (TheStreet) -- Shares of Barrick Gold (ABX) rose 3.6% to $12.36 in morning trading Wednesday after the company announced it had formed a joint venture with Saudi Arabian Mining Company, or Ma'aden, to operate the Jabal Sayid copper asset in Saudi Arabia.
The partnership should kick-start output at the mine, which has had lengthy delays.
The Toronto-based Barrick said it expects Jabal Sayid to start shipping low-cost copper concentrate in early 2016. Ma'aden, which the Saudi Arabian state controls, purchased a 50% stake in the Jabal Sayid project for $210 million in July.
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Barrick acquired Jabal Sayid in the company's $6.41 billion purchase of copper miner Equinox in 2011. A majority of the construction on the asset has been finished for some time, but output stalled because of permit problems and legacy issues over mining licenses, according to Reuters.
Separately, TheStreet Ratings team rates BARRICK GOLD CORP as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BARRICK GOLD CORP (ABX) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 27.3% when compared to the same quarter one year ago, falling from $172.00 million to $125.00 million.
- The share price of BARRICK GOLD CORP has not done very well: it is down 20.24% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has decreased to $852.00 million or 30.78% when compared to the same quarter last year. Despite a decrease in cash flow BARRICK GOLD CORP is still fairing well by exceeding its industry average cash flow growth rate of -55.16%.
- BARRICK GOLD CORP's earnings per share declined by 38.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BARRICK GOLD CORP reported poor results of -$9.63 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus -$9.63).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, BARRICK GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ABX Ratings Report