The action in gold and silver over the past week since the large drops is mixed. Since the Monday low for gold just above $4,000 (1:38 a.m. Eastern), the action has been encouraging, with gold gaining over $900, if not steadily. Silver, however, fell further.

It staged an impressive rally at the beginning of the week moving over $90, before dropping again, hitting its low of just over $64 an ounce on Friday morning in Asia, before recovering to close a tad below $78. That is 36% down from the high a week-ago Thursday, while gold is down just 11% from its peak.

We expect these trends to continue, with gold moving two steps forward, one back for the next few weeks before hitting new highs within a couple of months. I expect we have see the lows. Silver, however, I expect to be more volatile, and may retest its lows, but I expect it to be longer before we see new highs.

Should You Invest Now in the Precious Metals Equities?

We are buying the gold stocks, perhaps with a narrower focus, and opportunistically. Given the volatility, we are looking to buy the bests companies on the down days. Thursday was a good day to buy, but we were scarcely buying anything Friday. As for silver, the declines in the equities have been fairly muted given the large decline in the metal.

In fairness, though, many of the silver names had not moved higher in line with the silver price in December and January. However, a longer recovery with perhaps new lows for silver might see the stocks decline further. Thus, we have few “top buys” among the gold stocks below, but if you are an active trader, you should be alert to any pullbacks during the week.

Barrick Plans Reorganization With New CEO

Barrick Mining Corp. (ABX:TSX; B:NYSE) released year-end results and forward guidance, overshadowed by a flood of important announcements on the company’s strategy and future. Disturbingly, many details were omitted, even when questioned by analysts.

• The company plans to proceed with an IPO of its North American assets, including the Nevada Gold Mines (NGM), saying it intended to IPO a minority of around 10-15% of its interest with a target completion in the fourth quarter of this year. However, details were light, and during its analyst call, it would not respond to several questions on the specifics.
• It completed an operational review, with safety top priority. Business units have been restructured, with Pueblo Viejo going into the North American region, now overseen by Tim Crib, moved from Reko Diq; he is the group COO. The review appears to have been focused on Nevada which had had some operational issues in recent years, and difficulty attracting and retaining people. A Chief Technical Officer has been named at the group level.
• Barrick said its board is concerned about security in Balochistan, the province hosting the Reko Diq copper project. A review of the project is underway, though the company says “all options are being considered.”
• It named Mark Hill as permanent CEO after “an extensive search”. He stepped in as interim CEO when Mark Bristow abruptly left the company in September. Hill joined Barrick in 2019 after the merge with Randgold and was not seen as a Bristow loyalist.
• Barrick also introduced a new dividend policy, increasing its base dividend, and changing its bonus dividend program to a target of 50% of free cash flow. This equates to an estimated yield of 3.7%, one of the largest in the industry. This replaces the policy based on free cash on the balance sheet that had been in place only a couple of years, and adds more discretion to the dividend.
• The new dividend policy will replace buybacks going forward; the share buyback authorization has not been renewed for 2026. Last year, Barrick repurchased $1.5 billion of shares, representing about 3% of the shares outstanding. It was only a few years ago that Barrick started a buyback program, after stubbornly rejecting it for years under Bristow.

Pakistan Project’s Future Appears Uncertain

Barrick seems to be moving towards a smaller North American-focused company, with growing indications it will (or at least wants to) scale back its investments in Pakistan. One sign was its statement that it had paused proceeding with a loan for the project until its review had been concluded.

“It is too early to say” if a divestiture is on the table. As discussed before, the Saudi Arabian sovereign wealth fund wants into the project and was earlier rebuffed by Barrick who told the Saudis they should buy some of the Pakistan government’s stake. So there might be a ready buyer for part of Barrick’s interest.

North American IPO Only a Minority Interest, With Details Unclear

The North American assets proposed for the new company IPO represent just under 60% of Barrick’s NAV. The small spin off ensues that Barrick retains a controlling interest in NGMs and the other joint-venture mines. Separating the higher-quality North American assets will help to release some value but, if it spins off less than 15% of its interest–so less than 10% of the total mines–I question whether the new company would trade at the premium multiple the company is expecting. Conglomerate discounts are common, due to the complexity of organizations, and a partial spin off of assets partially owned, add to complexity.

Several question remain hanging over the transaction, most notably the ROFR held by Newmont Corp. (NEM:NYSE; NGT:TSX; NEM:ASX). Barrick, in answers to questions, said “we are well aware of our legal contracts,” which does not really answer the question. The last thing the company needs is a legal dispute with Newmont over rights.

Given that Newmont apparently has a ROFR on NGM, is a partner in the Pueblo Viejo mine, and has rights to invest in Fourmile, Newmont must be looking seriously at whether to make a bid for these assets. On the analyst call, Barrick would not say whether it had held talks with Newmont over its rights. In addition, Barrick has yet to address the use of proceeds; and the domicile of the new company, important for index inclusion.

A Large Dividend Boost, Despite Capital Needs

The new dividend policy represents an annual distribution of $2.8 billion or more. Given the company’s large capital requirements, one might question the wisdom of such a large dividend.

This might also be another signal on intentions regarding Reko Dik. Although one metric may be better than another, the large gold companies (Barrick and Newmont) have a history of introducing dividend policies only to abandon or change them, which defeats the point of having a policy in the first place. Barrick’s previous policy had only been in place a couple of years.

Results Were Strong, Though Guidance Soft

The announcements on the IPO, Pakistan, the new CEO, and the dividend, overshadowed the fourth-quarter results which were in line with expectations, though guidance was distinctly weak. The fourth-quarter saw strong financial results, with the highest production of the year (as indicated by Bristow last January that it would), and unsurprisingly, given the gold and copper prices, record cash flow and adjusted earnings per share.

Gold production was up 5% over the third-quarter, driven by large increases at the Nevada mines, while copper output was 13% higher than Q3, primarily driven by Lumwana in Zambia. However, costs in the fourth quarter were higher than anticipated. Annual shareholder returns in 2025, from share buybacks and the dividend, were the highest ever.

On specific mines, Barrick said it had restarted all three underground mines at Loulo-Gounkoto in Mali and said the relationship with the government is being reset. It paid the government over quarter-of-a-billion dollars to settle the dispute as well as committing to pay the government all retained earnings. In addition, it appears to have conceded the government’s demand to increase its ownership to 20%. Barrick said the mine complex was expected to produce this year only half its 2024 output as it ramps back up.

It also said that recoveries at the Pueblo Viejo mine in Dominican Republic remain a challenge, and it set a new lower target recovery rate. Currently recoveries are around 75% and the new target is 84%. Hill said that, despite lower recovery rates, the mine life would be extended to 2048 maintaining the same total output produced.

Guidance Calls for Lower Production and Higher Costs

Guidance for 2026 was soft, with no guidance beyond. The company said it expected the seventh consecutive year of lower gold production, 10% higher costs (14% above consensus estimates), and significantly higher capex than expected (again, questioning the dividend increase). The production drop comes despite the restart of Loulo-Gounkoto. Once again, the second-half is expected to be stronger with about 55% of the annual production. It would appear, however, that the company has deliberately set cautious guidance, which it aims to achieve, rather than the admittedly optimistic guidance provided by Bristow, which often seemed more like goals.

Longer term, the company indicated that the cost outlook beyond 2026 should remain flat, rather than the cost reductions earlier indicated. This was in response to a question. Interesting, and rather disturbingly, many of the more significant details (long-term cost outlook, size of NGM IPO and more) were only revealed in answers to questions rather than stated upfront by the company.

Barrick’s proven and probable reserves totaled 85 million ounces at year-end, calculated at $1,500, with 150 million ounces of measured and indicated resources, calculated at $2,000. These numbers are lower than 2024 due to the sale of two mines. Copper resources, calculated at $3.25/lb, remained stabled at 18 million ounces. For reference, spot prices at $4,964 and $5.88, so the assumed prices seem very low.

We are holding, awaiting progress on the North American IPO.

Transition at Wheaton as CEO Moves Up

Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) said founder and CEO Randy Smallwood would step down and become non-executive Chairman of the Board, to be replaced at CEO by current President, Haytham Hodaly. Helping to found the company in 2004, Smallwood has led the company for 15 years.

A mining engineer by training and former analyst at RBC, Hodaly joined Wheaton in 2012 and has recently been in charge of executing streaming transactions.

Hold.

Tether Strengthens Its Grip on Metalla

Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American) saw Tether report additional share purchases, taking its stake to 8.9%. It last reported a month ago, with 7.8%. It appears to be buying in the market, consistently, rather than actively taking advantage of price dips. It is now the second largest holder, behind Beedie Investments (10.3%) which had provided debt facilities to the company before converting entirely to equity, and ahead of Euro Pacific at 6.2%.

(Disclosure: I manage Euro Pacific gold fund and gold accounts.)

Metalla is a buy independent of Tether’s growing interest.

Ares Maintains Dividend and Credit Standing

Ares Capital Corp. (ARCC:NASDAQ) reports a solid quarter, with 50 cents per share of core earnings, once again in excess of the dividend, which remains stable at 48 cents per quarter. Credit, both non-accruals and the investment grade, remained stable, while the Net Asset Value increased slightly over the year-ago quarter (though modestly down quarter-on-quarter). It is the highest rated BDC by all three ratings agencies.

New activity remains strong, with the majority for loans during the year to existing portfolio companies, for growth, while the second half saw a pick up of new borrowers, adding over 100 new companies. Exits averaged an IRR of 25%. The company remains in a great position to invest in undervalued areas with high cash balance and low leverage.

In keeping the dividend flat, the company said it was in a good position to maintain the dividend, despite lower rates in the economy. It has low leverage (1.08x), its portfolio companies have strong debt coverage, while its carry forward income equivalent to $1.38 per share, represents nearly three quarters of dividends, providing a cushion for any temporary income shortfalls. It estimates that the decline in rates, and therefore a decline in earnings, will represent about 1 cent per share in the current quarter.

How Exposed to Software Weakness in Ares?

On the analyst call, there was much discussion on the risks posed by the software industry. It was positive to see the company tackle the subject head on, and not wait for questions to respond. CEO Kort Schnabel said the company recognized the risks of new technology and obsolescence. But he added that Ares’s portfolio will remain “highly resistant”, since it invests in foundational technology, as well as software for regulated industries, which are much slower to change software.

Trading just below NAV with a yield of 9.95%, Ares is a buy for long-term income investors. Disruption in the sector, however, including possible dividend cuts or credit troubles, even at other companies, will raise concerns about even the strongest companies in the sector, so we may see increased volatility going forward.

Hutchison’s Revenue and Profits Increase as It Struggles With Global Trade

Hutchison Port Holdings Trust (HPHT:Singapore)  reported revenue up 2.6% for the year, with profit up over 15%. Despite this, the final distribution was cut again, to 6½ cents (HKD) down from 8 cents two years ago, representing a forward dividend of 6.7%. Revenue rose thanks to higher throughput at the Yantian terminals in Shenzhen. The company noted that though exports from Yantian remained strong, more ships were returning empty. Throughput at the Hong Kong terminals, which were the historic base of the company, fell again, by over 6%. The high profits increase was largely due to the revaluation of the company’s yuan-denominated financial assets, offset partly by higher capex.

The company said the outlook was uncertain, facing “a complex landscape marred by the constant shifting in trade and tariff policies.” The new “China plus one” strategy of diversifying dependence on China for materials, is unlikely to change back to sole reliance on China, even if the trade dispute smooths over, in my view. So this is a fundamental shift for Hutchison. At the same time, growth across Europe is expected to be subdued amid geopolitical tensions.

Hold, particularly as part of a diversified income portfolio.

TOP BUYS this week, in addition to above, include Kingsmen Creatives Ltd. (KMEN:SI), Lara Exploration Ltd. (LRA:TSX.V), and Orogen Royalties Inc. (OGN:TSXV; OGNNF:OTC).