How Successful Have Barrick Gold’s Debt Reduction Efforts Been?

June 8th, 2016 by Trefis Team

In response to the decline in gold prices over the course of 2014 and 2015, Barrick Gold has made a concerted effort to lower its debt burden. Through a combination of improved cash flow from operations (through cost reduction measures and the rationalization of capital spending) and the sale of high-cost mines, the company has managed to pay off some of its outstanding debt. The company had also achieved 42% of its $2 billion debt reduction target for 2016 at the time of declaration of its Q1 results. As a cumulative result of its debt reduction efforts and cost reduction efforts (which have helped prop up the company’s EBITDA), Barrick Gold is set to report better measures of indebtedness ( as shown below), which has helped preserve the company’s investment grade credit rating.

ABX Success Of Debt Reduction Efforts

 

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Note: 2016E figure for Total Debt assumes that Barrick achieves its $2 billion debt reduction target for the year.

Have more questions about Barrick Gold? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Barrick Gold

 

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