When Barrick Gold (NYSE: ABX) announced earnings last week, while the numbers were good, it was the underlying message that should give investors hope. CEO Jamie Sokalsky took ownership of the challenges facing his company, and the industry in general, repeating his message of a quarter ago that the company is ratcheting down its controls to create a more streamlined operation that focuses on maximizing shareholder value.
“Investors are rightfully demanding fundamental change in the gold industry, and Barrick is driving this new paradigm,” Sokalsky said. While the stock rose initially on Thursday, Friday’s price action suggests that the market remains unconvinced; the $4.2 billion after-tax impairment charge was not likely to escape punishment. The company and the industry are getting the message that spending needs to be kept in check, and ultimately, Barrick is positioned to lead gold stock much higher.