Buffett and Berkshire Hathaway’s financial investment is the ‘ultimate privilege’: CEO of Barrick Gold

Barrick Gold Corp. CEO Mark Bristow believes Warren Buffett’s inaugural Berkshire Hathaway investment is a “milestone” for his gold mining company and the business.

Berkshire has introduced a new 20.9 million share stake in Barrick Gold, with a real value of $ 564 million. The investment, leaked Friday night, gives Berkshire a 1.18% stake in Barrick and makes it the 11th largest shareholder.

“It is the supreme privilege to have Berkshire Hathaway as an investor in his business and all that I aspire to,” Bristow told FOX Business exclusively. “We hope this is not the end.”

Spending information prompted Barrick Gold shares to jump 12% Monday to their highest in more than 7 years. Inventory gained 62% this calendar year.

Teleprinter Security The very last To improve Adjust %
GOLD BARRICK GOLD CORP. 30.13 +3.14 + 11.63%
BRK.A BERKSHIRE HATHAWAY INC. 310 220.00 -6,031.00 -1.91%

Berkshire’s stake in Toronto-based Barrick Gold comes despite the two Buffets and his right-hand man Charlie Munger over the decades frequently expressing their contempt for gold.

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In 2005, Buffett complained that gold was “something that is mined out of the ground in Africa” ​​and has “no use”.

Munger, at the time, famously explained that “civilized people never buy” gold.

Warren Buffett (left), CEO of Berkshire Hathaway, and vice chairman Charlie Munger
Resource: JOHANNES EISELE / AFP using illustrations or Getty photos

When Buffett’s team did not disclose the reason for their financial commitment, it was possible that the final decision was made by Todd Combs or Ted Weschler, investment trustees who are potential successors to Berkshire.

FOX Business requests to Buffett were not returned at time of posting.

So what exactly is Berkshire getting?

Bristow, who hasn’t told anyone at Berkshire about financial investing, said the Omaha-based conglomerate is investing in a miner who has the “best people running the best assets” and his company aims to generate funds. in all cycles and does not need to “pray for the price of gold” to soar to help turn it into a gain.

Barrick, in a move that showed the energy of his company, last week increased its dividend by 14% to 8 cents a share. The dividend increase came as more than 180 organizations cut dividends and another 150 suspended payments due to the uncertainty caused by COVID-19.

The rise in Barrick dividends absolutely put a smile on Buffett’s face, as he has long expressed his love for stocks with reliable and long-lasting payouts, something Bristow has sent throughout his job.

Bristow’s former company, gold miner Randgold Assets, increased its dividend for 13 years, never gaining market share. Randgold merged with Barrick in 2018, developing the world’s next largest gold miner.

The 31% rise in gold price brackets this year has strengthened Barrick’s business base while reducing operational threat, increasing cash flow and strengthening its stability sheet. This has allowed Bristow to “step up” its revised dividend coverage, which will now depend on “some form of ratio” whether it is net cash flow or circulation of money, he said. declared.

At the end of the second quarter, the board said it believed the dividend increase was sustainable after declaring “total cash of $ 6.7 billion, as well as a balance of 3.7 billion dollars. billions of dollars”.

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“We are extremely privileged to have them [Berkshire Hathaway] as an owner, and we come to feel the same about whoever buys our shares, ”Bristow explained.


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