Skip to main content

Barrick–Newmont Nevada JV, Permitting Risk, Royalties, and Mine Financing | Analyst Joe Mazumdar

MiningStockEducation.com Sep 15, 2026 51:52

Summary

Barrick is selling Fourmile at a steep discount, but access to permitted autoclave (pressure oxidation) capacity via Goldrush justifies it.

Seabridge's KSM court setback shows Indigenous consultation now extends beyond a project's footprint, raising permitting risk across British Columbia.

Major gold producers returned roughly 30% of first-half 2026 revenue to shareholders, with buybacks outpacing dividends and the top five dominating.

Judge management on per-share value: grow assets without growing the share count, and favor teams that raise capital at rising prices.

Coffee's upfront capital quadrupled in a decade, reinforcing the case for hunting fatal flaws early — cutoff grades, jurisdictions, and site visits.

Key points on Anglogold Ashanti

  • The guest credits AngloGold Ashanti's push to tout its Nevada oxide discovery — part of repositioning beyond its African base — with generating the news flow that re-rated Orogen Royalties' 1% NSR on what became a roughly 20 million ounce deposit, before the royalty paid anything.
  • Per the guest, AngloGold funded the exploration that grew the deposit underlying Orogen's royalty while the royalty generator itself spent nothing.

Key points on Barrick Mining

  • Per the guest, Barrick agreed to put its 38.5% of the Fourmile deposit into the Nevada Gold Mines JV against $1.95 billion from Newmont, implying about $5 billion for Fourmile on a 100% basis — a 25-50% discount to analyst values of $6.6-10 billion for the scoping-stage project.
  • The guest argues Barrick accepts that discount because Fourmile can feed the JV's already-permitted pressure-oxidation circuit and be accessed through Goldrush, cutting the project's high capital intensity, and because closing the North American spinco is a strong motivation.
  • Barrick wants to split its North American assets from the rest of the world because, per the guest, projects in Pakistan (one suspended in Balochistan), Zambia, Mali and the DR Congo put a geopolitical discount on the whole company and raise doubts about dividend sustainability.
  • Per the guest, investors judged Newmont got Fourmile cheap: Newmont stock rose while Barrick stock fell on the agreement.
  • The guest expects Fourmile (15-16 million ounces at 15-17 g/t) to drive the value of post-spinco Barrick, and suggests the spun-off rest-of-world company could eventually attract Chinese or Middle Eastern buyers.

Key points on First Majestic Silver

  • Per the guest, Orogen Royalties' 2% NSR on Ermitano — a First Majestic asset in Mexico — became a producing, cash-flowing royalty, which helped keep the royalty generator out of the equity market.

Key points on Lundin Gold

  • The guest cites Lundin Gold in Ecuador as an example of a single-asset company carrying a geopolitical discount, noting such companies typically pay out a high share of cash flow in dividends so investors focus on the payout rather than the jurisdiction.

Key points on Newmont

  • Per the guest, Newmont's complaints that Barrick was using Nevada Gold Mines infrastructure to advance Fourmile — plus its 38.5% JV stake and approval right over the spinco — got Fourmile pulled into a deal where Newmont paid $1.95 billion, most of it for Fourmile since the assets it contributed are not even in resource statements and have no mine plans.
  • The guest sees the deal as good for Newmont and would vote for it as a Newmont shareholder: permitted facilities and existing underground access mean only underground development is needed, so the project could come into play much sooner.
  • On geology, the guest describes Fourmile as single-refractory (autoclave-friendly) and hosted in strong geotechnical rock that suits bulk mining at higher throughput than typical Carlin deposits.
  • On Canada's Red Chris block-cave expansion — a Newmont project since it bought Newcrest — the guest objects to the Canadian government lending roughly $500 million to a US company he says can afford the $2.6 billion build itself.

Key points on Seabridge Gold

  • The guest calls the BC court ruling — that a First Nations group was not fully consulted on KSM's substantially-started permit — a clear negative for Seabridge: there is a 90-day window with an unknown outcome, and with about $1 billion already spent the company will find it hard to land the partner it is looking for.
  • Scale drives the dispute, per the guest: KSM is a 170,000 tonne-per-day, $6.4 billion project with 7.3 billion pounds of copper, 47 million ounces of gold and twin 23-kilometre tunnels — big enough that groups downstream or on the fringe of the footprint feel affected though they were never consulted.
  • The guest argues the sector needs a consultation buffer zone beyond the formal footprint, notes UNDRIP has given First Nations a bigger say, and flags the precedent of one nation lobbying on behalf of a smaller nation the court found was ignored.
  • Beyond Seabridge itself, the guest says the ruling looks bad for BC and Canada because the company did the substantial-start work in good faith, and he compares the accountability question to Mount Polley, where the company ultimately bore the worst reputational and financial damage.

Key points on Orogen Royalties Inc

  • The guest calls Orogen (named 'Origin Royalties' in the audio) one of the best returns he has made — about a 15-bagger on one position and roughly 8x on another, held since 2009 and 2012 — crediting management that kept dilution minimal and never returned to the equity market, with no ATM or base shelf.
  • Per the guest, Orogen ran a tight prospect-generator model — option out projects, keep only 1-2% NSRs — and became cash-flowing after acquiring a 2% NSR on Ermitano, a First Majestic asset in Mexico, which let it fund itself without issuing shares.
  • Its 1% NSR covered what became a roughly 20 million ounce oxide deposit in Nevada operated by AngloGold Ashanti, so AngloGold's news flow drove Orogen's valuation even before the royalty paid.
  • The guest says Orogen sold the royalty to a larger royalty company for a liquidity event before production — 'nirvana' in his words — and he still holds the position in case the team does it again.

Bill Powers's takeaways

  • Top takeaway The host argues investors should measure management on a per-share basis — adding to asset value without adding much to the share count — and says the strongest pitch is a track record of consecutive raises at successively higher prices, citing a flow-through executive's four-raise record.
  • The host warns that silver juniors typically keep ATM facilities ready to sell into strength when silver runs, and cautions listeners that even deep due diligence does not guarantee outcomes — 'don't confuse a bull market with brains.'