Picture this: gold is hitting all-time highs week after week, miners should be printing money, yet one of the biggest names in the business is still trading like it’s stuck in the last bear market. That’s been the frustrating reality for anyone holding Barrick Gold over the past few years—until the last six months, that is.
The stock has more than doubled since summer. And then, out of nowhere, one of the most feared and respected names in activism shows up. Elliott Management takes a stake, whispers (well, probably shouts in private) about splitting the company in two, and suddenly the board that spent years brushing off the idea is “exploring a potential separation” of the North American assets. Funny how that works.
The Breakup That Everyone Saw Coming—Except Management
Let’s be honest: the idea of carving out the crown jewels in Nevada and Canada from the rest of the global portfolio isn’t exactly new. Investors have been drawing that exact line on napkins at conferences for a decade. The math is almost embarrassingly obvious.
On one side you have some of the best, longest-life, lowest-cost gold (and copper) deposits on the planet, operated in stable, mining-friendly jurisdictions. On the other side you have a collection of assets in countries that—let’s just say—come with a little more headline risk. Africa, Pakistan, Latin America… great geology, complicated politics.
The market has never been subtle about how it feels. Pure-play North American gold companies trade at healthy premiums to net asset value. The best of the best, think Agnico Eagle, routinely sit around 1.5 times NAV or higher. Barrick? Even after this monster run, it’s still under 1 times. That gap is the market screaming: “We don’t want the baggage.”
Why the Discount Has Been So Stubborn
Investors buy gold stocks for one primary reason: leveraged exposure to the gold price. Everything else—management skill, cost control, growth pipeline—is secondary. When the metal is ripping higher like it is now, you want the cleanest, purest ride possible.
Barrick, for all its scale and quality, has simply never been seen as the cleanest vehicle. Operational hiccups over the years didn’t help. Neither did the occasional geopolitical scare. The result? A permanent risk discount baked into the shares.
Owning Barrick has always felt like buying a Ferrari with a trailer full of bricks attached. You still get the horsepower, but you’re dragging dead weight everywhere you go.
Strip away the trailer and suddenly you’re left with one of the most valuable fleets on the road.
Elliott Didn’t Invent the Thesis—They Just Lit the Fuse
Give credit where it’s due: the current management team actually put the breakup math on slides back in May. They showed that re-rating just the North American assets to peer multiples could unlock close to 50% upside. Gold is up more than 70% since then, the stock more than 100%, so a chunk of that value has already been realized. But the re-rating gap? Still there. Wide open.
Enter Elliott. They didn’t need to spend months crafting a public presentation. They’ve likely been watching (and quietly buying) for a long time. When they finally surface, the message is short and to the point: fix the structure.
Two weeks later the board authorizes exploring exactly that. Coincidence? Hardly.
The Interim CEO Wildcard
Timing is everything in activism, and Elliott caught an absolute gift: Barrick is currently hunting for a permanent CEO after the abrupt September exit.
An interim leader creates two massive openings. First, whoever walks into that corner office knows they’ll have Elliott looking over their shoulder. No candidate with serious options takes the job unless they’re comfortable with (or ideally aligned with) the activist’s thinking.
Second, big strategic moves are infinitely easier when there isn’t an entrenched CEO defending the status quo they built. Interim periods are when boards finally feel free to ask the uncomfortable questions they’ve been avoiding.
- Who exactly benefits from keeping Pakistan’s Reko Diq project tethered to Nevada’s world-class Carlin trend?
- Why should shareholders in Toronto or New York bear Congo-level political risk for assets that dilute the value of Tier 1 mines?
- Wouldn’t two focused, best-in-class companies be worth dramatically more than one compromised giant?
Those aren’t hypothetical anymore. They’re on the table.
What a Split Could Actually Look Like
Several paths exist, none mutually exclusive.
The cleanest—and most valuable—would be spinning off the African and emerging-market assets into a separate listed company while keeping the North American portfolio (including the 61.5% of Nevada Gold Mines) as the continuing Barrick. Instant re-rating for the core business, and the “Rest of World Co” would trade on its own merits (probably cheaper, but at least the discount would be isolated).
Another option: sell or IPO some of the non-core pieces individually. The Lumwana copper mine in Zambia, for instance, would fetch a fortune in the current copper bull market. Same for the developing Reko Diq project if they ever want to monetize early.
Or go radical: full breakup into regional pure plays. North America, Africa, Copper, etc. More complicated, higher execution risk, but potentially maximum value creation.
My gut says they’ll start with the simple North America vs. Rest of World split. Clean, understandable, and gets 80% of the value unlocked with minimal drama.
How Much Upside Are We Really Talking About?
Let’s play with some rough numbers (always dangerous, but fun).
Current market cap around $69 billion. Analysts’ average NAV estimates float in the $75-80 billion range, so the 0.9x discount is real. Best-in-class North American peers trade 1.4-1.6x NAV. Apply 1.5x to just the Nevada/Carlin/Hemlo/etc. assets (being conservative) and you’re already looking at a core business potentially worth $55-60 billion on its own.
The remaining assets—call it Emerging Markets Co—would probably trade at 0.7x NAV or lower initially. Say $20-25 billion. Add them up and you’re already north of $80 billion in combined value, and that assumes zero synergy value destruction (which history suggests is rarely the case—spin-offs often trade up after the initial dust settles).
In other words, there could easily be another 20-40% embedded just from fixing the structure, even after the massive run we’ve already seen.
Will Elliott Push Harder or Sit Back?
Here’s where it gets interesting. Elliott has a reputation for being relentless when management drags its feet, but they’re also perfectly happy to play nice when things are moving in the right direction.
Right now the board is doing exactly what Elliott asked. Publicly, at least. That buys management a lot of runway. I’d be shocked if we see a proxy fight or public letter in the next few months unless the strategic review suddenly goes silent or produces some half-measure that doesn’t address the core issue.
More likely scenario: quiet cooperation behind the scenes, maybe a board seat or two for Elliott-nominated directors who actually know the mining business (they’ve done this before), and a well-telegraphed transaction sometime in 2026.
Risks? Of Course There Are Risks
Nothing this juicy comes without caveats.
- Execution risk on any separation is real—taxes, debt allocation, shared services, Nevada JV approvals.
- Gold price can be fickle; if we roll over hard, all miners get punished regardless of structure.
- Emerging-market assets might struggle to find a valuation floor as a standalone entity, dragging sentiment temporarily.
- Management could still botch the CEO search and hire someone wedded to the old conglomerate model.
Fair points. But with gold showing no signs of slowing and copper looking equally constructive longer-term, the macro backdrop couldn’t be much better for working through those issues.
The Bottom Line
Six months ago Barrick was the perennial underperformer everyone loved to hate. Today it’s one of the best-performing large-cap miners on the planet, and the story might still be in the early innings.
Elliott’s arrival feels less like the start of a hostile campaign and more like the catalyst that finally forces the company to do what patient shareholders have been begging for since the Newmont merger fell apart years ago: get focused, get simple, get valued properly.
If the board follows through—and with Elliott watching, the probability feels higher than it’s ever been—Barrick shareholders could be looking at not just another leg higher, but the rarest outcome in mining: a permanent re-rating to best-in-class multiples.
In a sector where most value creation stories end with “and then the gold price fell,” that would be something worth owning.
