Why the hell is Paul Singer buying Barrick Gold?
Singer founded his hedge fund Elliott Management in 1977, specializing in activist investing and distressed assets.
The fund is now one of the oldest on Wall Street, and over the years, Singer has forged a reputation of buying extremely distressed assets at massive discounts, and then squeezing them for considerable gains through shrewd management and tenacious methods.
He famously once took Peru to court after buying the country’s debt for $11.4 million, and won a judgment of $58 million – which Singer finally received after seizing the Peruvian President’s private jet.
I could go on. Singer is about as tough and shrewd as it gets on Wall Street. In a world full of sharks, he’s one of the great whites.
Which makes his latest purchase, a ~$1 billion stake in Barrick Gold (NYSE: B) seem like something of a departure from his typical fare.
I think it means something pretty substantial though. Singer wouldn’t buy the world’s 2nd largest gold miner if he didn’t see some kind of massive value unlock in the future.
Singer also owns a substantial stake in a gold royalty firm that he founded…
To be clear: I don’t believe either Barrick nor Singer’s royalty firm are distressed assets. But Singer doesn’t buy assets just because they’re distressed. He buys them because he sees the considerable upside. There’s no guarantee that buying an impaired asset will lead to gains.
Clearly, Singer believes Barrick has the same kind of upside. There’s no other reason to buy it.
I don’t typically cover large cap gold majors like Barrick for a variety of reasons, but there’s something big happening at Barrick right now.
They just discovered and are developing what might be the biggest gold mine in the past 30 years. The Fourmile project in Nevada potentially will turn into a 750,000/oz per year gold mine.
Singer’s goal appears to be to split off the American Barrick assets from the riskier overseas assets, turning Barrick into at least two companies.
And it could be interesting to see what comes out of this kind of split. I would not be surprised to see Singer form another royalty firm from the bits and pieces leftover.
Buying early stage royalty assets is a lot like distressed asset investing. You’re putting up cash to hopefully see a long-term project pan out. For gold royalty firms, the project is a gold mine. For distressed debt, it’s a restructuring or a settlement. In either event, you are hoping to see a multiple come out of your initial stake.
Singer appears to see the value in gold stocks and royalty firms. And he’s one of the best in the business.
For anyone worried that you’re late to the party – just know that when someone like Singer is putting money to work, there is still massive value to be had.
Singer is a sufficiently large investor that he really can’t do much with companies that are under say $5 billion market cap.
His Elliott Management hedge fund oversees $76 billion AUM. In order to achieve returns that move the needle, he really can’t buy anything close to the small cap stocks that I cover in my portfolio.
For instance, right now my #1 favorite gold stock to own through at least Q2 of 2026 still sells for under $700 million market cap. Singer can’t buy this kind of company without buying the whole thing at a massive premium.
There’s still a 5X-10X upside for this company in the coming months.
You can put money to work today in this fantastic company.
Read here for my full write-up.
But keep in mind: we’re going to enter a period when this kind of value is not so easy to find. Singer is leading the way, but he won’t be alone.
Invest now, accordingly.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio