Elliot built large stake in Barrick: report

[Ben Graham]

US activist hedge fund Elliott Management has accumulated a large stake in Barrick Mining (TSX: ABX) (NYSE: B) amid speculation that the Canadian-based gold-copper miner may undergo major changes, the Financial Times reported on Tuesday.

It follows a Reuters report last week which revealed the Barrick board is considering splitting the company into two separate entities, one focused on the “safer” North American assets and the other on mines across the “riskier” Africa and Asia regions.

According to FT, citing its sources, those at Elliot are “encouraged” by this potential breakup of Barrick. The idea of a spinoff — along with possible asset sales — had been brought up by analysts since the sudden departure of chief executive Mark Bristow in late September. Bloomberg reported last month that rival Newmont (TSX: NGT, NYSE: NEM) had mulled a potential deal to gain control of its prized Nevada gold assets.

A split into two would essentially revert the modern-day Barrick that was created in 2019 through its acquisition of Randgold.

While FT did not disclose Elliot’s exact shareholding, the size of its stake would be enough to place the Florida-based fund amongst the top 10 shareholders, its sources said. Barrick’s current top shareholders include Capital Research & Management and Vanguard.

Barrick’s NYSE-listed shares climbed 1.4% at market open following the FT report, giving it a market capitalization of $63.7 billion. Year to date, the stock has gained nearly 135%.

Elliot, with about $76 billion in assets under management, is no stranger to the mining industry, having already built a large stake in Anglo American, which has now agreed to merge with rival Teck Resources (TSX: TECK.A/TECK.B), and Triple Flag Precious Metals (TSX, NYSE: TFPM).