Gold SWOT: Barrick Gold Announced the Sale of the Hemlo Gold Mine for up to $1.09 Billion

Strengths

• The best performing precious metal for the past week was palladium, up 10.55%. ETFs have now added palladium for eight consecutive days, with 1,777 troy ounces purchased, signaling ongoing institutional demand. Strategic moves like Sprott Asset Management’s $100 million issuance highlight strong fundamentals, driven by palladium’s key role in catalytic converters and resilient industrial demand.
• Precious metals refiner Heraeus notes that the Saudi Central Bank has moved into silver by acquiring $40.6 million worth of shares in the iShares Silver Trust and Global X Silver Miners ETF. These investments likely reflect a broader strategy by the country’s sovereign wealth fund. While the ETFs are backed by physical metal, this does not represent a direct bullion purchase.
• Catalyst Metals has supercharged the gold market, announcing a 100% increase in reserves at its Plutonic Gold Belt to 1.5 million ounces. With a new 10-year mine plan and a 200,000-ounce annual production target, the company is helping drive the rally. Shares hit an all-time high, showing how reserve growth can boost both investor confidence and market momentum.

Weaknesses

• Gold was the worst performing precious metal of the past week, though still up 0.83%. China’s move to ease gold import/export rules aims to diversify reserves away from the U.S. dollar and boost trade. While this increases market liquidity, it may reduce gold’s role as a traditional haven asset during geopolitical uncertainty.
• Following Pan African’s trading statement and operational update, the company reported its fiscal 2025 results with in-line production, slightly higher costs, and lower-than-expected earnings, according to BMO.
• According to Scotia, Pan American Silver updated its Reserves and Resources to include 452 million ounces of silver and 6.3 million ounces of gold—a 3% and 8% decrease, respectively—due to mining depletion and the divestment of La Arena. Silver and gold resources were down 2% and 36%, largely driven by the sale of the La Arena mine and the Joaquin property.

Opportunities

• Bank of America examines the meteoric rise in the global gold sector's total market capitalization, now around 2x previous cycle peaks. However, as a percentage of total world equity market capitalization, the gold sector remains well below prior highs. In terms of valuation, the sector also trades below historical peak levels.
• Barrick Gold announced the sale of the Hemlo gold mine for up to $1.09 billion, including an upfront cash payment of $875 million. They see the deal as accretive to Barrick's NAV and another significant non-core asset sale this year.
• BMO views Wheaton’s acquisition of a $400 million gold stream on Hemlo as having a strong internal rate of return (IRR) of over 6% at spot prices. They favor deal features such as delivery rate upside if production misses plan and reduced stream rates on Franco-Nevada’s 50% NPI royalty land to maintain an economic mine plan at Hemlo. The stream could be reduced by 25% if gross proceeds from the upcoming private placement exceed $300 million.

Threats

• According to the Swiss Association of Precious Metals Producers and Traders (ASFCMP), “Historically, gold trade volumes between Switzerland and the USA were well balanced and are likely to continue on that basis in the long term.” The association will now analyze the details of the executive order to determine the best way forward for its members and partners. Nevertheless, the ASFCMP welcomes the opportunity to resume the longstanding and trusted gold trading relationship between Switzerland and the United States on a secure and stable basis.
• Centerra has less leverage to higher prices compared to peers due to declining Oksut production, stream-impacted Mount Milligan output (30% discount to spot), and below-average gold exposure (65% in 2028E versus peers above 90%), according to RBC.
• Centerra Gold reported the results of a prefeasibility study on its Mount Milligan copper-gold mine in British Columbia, Canada. The average all-in sustaining costs and total capex are 75% and 39% higher, respectively, than Bank of America’s expectations.

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