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Barrick (GOLD) Invests $23.4 Million in Hercules Silver Corp

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Barrick Gold Corporation (GOLD - Free Report) has agreed to subscribe to 21,265,370 units of Hercules Silver Corp. in a non-brokered private placement at $1.10 per Unit, totaling around $23.4 million. Each unit comprises one common share and 0.32 of a common share purchase warrant, enabling the holder to acquire one Hercules common share at $1.32 per share for two years.

Barrick holds 5,291,500 common shares of Hercules, about 2.73% of the latter’s non-diluted common shares (issued and outstanding). After the Private Placement, Barrick will possess 26,556,870 common shares and 6,804,918 warrants, representing nearly 12.33% of Hercules' non-diluted common shares and 15.02% on a partially-diluted basis. The closing is expected to occur by Nov 8, 2023, subject to customary conditions and approvals, including the TSX Venture Exchange's approval.

Barrick and Hercules will establish an investor rights agreement as part of the Private Placement, granting Barrick anti-dilution and information rights as well as a right of first refusal concerning Hercules' Hercules Silver Project. For three years from the agreement date, Barrick will either vote its Hercules common shares in alignment with Hercules' recommendations or abstain from voting on certain matters. GOLD will not acquire more than 19.9% of Hercules' outstanding common shares, with some exceptions. Barrick will also provide technical support and expertise to Hercules for the 2024 season and program.

Barrick’s shares have inched up 1% in the past year compared with an 11.2% rise of the industry.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s adjusted earnings per share for the third quarter of 24 cents beat the Zacks Consensus Estimate of 21 cents. It recorded total sales of $2,862 million in the quarter, up 13% year over year. The figure missed the Zacks Consensus Estimate of $2,998.8 million.

For 2023, Barrick anticipates attributable gold production to be modestly below the bottom end of its earlier announced guidance range of 4.2-4.6 million ounces.

 

Zacks Rank & Key Picks

Barrick currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. (ANDE - Free Report) and Linde plc (LIN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.57, indicating a year-over-year growth of 213.2%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have surged 69.1% in the past year.

The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised 3.3% upward in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4% on average. ANDE’s shares have rallied around 37.7% in a year.

The consensus estimate for Linde’s current fiscal year earnings is pegged at $14.08, indicating a year-over-year growth of 14.6%. LIN beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 5.7%. The company’s shares have rallied 23.7% in the past year.


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