The shares of the international mining company Barrick Gold, the principal shareholder of the Pueblo Viejo mine, fell by 12.56% before the close of the New York Stock Market yesterday afternoon, Monday 15 April. So far this year they are down 51.38%.
According to a Bloomberg report, the Barrick shares on the market opened at US$21.26, but dropped US$2.84. Yesterday the shares of the mining company closed at US$19.78. The fall of the Barrick Gold share value comes at a time when there is a downward trend on the international gold market, and because of the problems that it has experienced in the Pascua Lama project on the Chile-Argentina border, as well as in the Dominican Republic. Gold fell 9.3% in New York yesterday, Monday 15 April, its worst loss since 1980, and closed at US$1,361.10 an ounce, after the disappointing growth figures from China caused a generalized loss in the prices of raw materials.
The JP Morgan report said: “Barrick Gold focused on growth and offered investors gold exposure with market leading liquidity. Now the company is having difficulty in the restructuring for the more cashflow focused ‘twenty teens’. Having some of the industry’s biggest mines, Barrick has been most exposed to capital spending overruns and is still in growth mode while investors have changed.” “The company now faces demands from the Dominican Republic for a bigger share of early cashflow from its PuebloViejo project and now faces added complexity as it has been forced to cease construction on the Chilean side of its Pascua Lama project. These uncertainties have been compounded by the recent pullback in gold prices, which we suspect could be anticipating further strengthening of the US dollar.”