What is the outlook for operating cost trends in light of the higher production volumes and project pipeline?

Operating‑cost outlook

Barrick’s Q2 results show that the “higher‑production, lower‑cost” strategy is now bearing fruit. The lift in gold‑and‑copper output—combined with the advancement of Tier‑One projects that are already on‑budget—creates a classic economies‑of‑scale effect: fixed‑cost items (administration, overhead, processing plant depreciation) are spread over a larger tonnage, while the incremental cash‑flow from the new mines is largely incremental revenue. As a result, the company’s all‑in‑sustaining cost (AISC) per ounce is expected to trend modestly lower or at least hold steady despite the near‑term cap‑ex outlay required to bring the pipeline online.

Trading implications

• Bullish catalyst: The cost‑down trajectory underpins a stronger margin outlook for the second half of 2025, reinforcing the “higher‑production, stronger cash‑flow” narrative that has already lifted the stock’s momentum.
  
• Entry point: With the market still pricing in the short‑term cap‑ex drag, a pull‑back to the $38–$40 range (≈ 10%‑15% below the recent high) offers a low‑risk entry for a position that can capture upside as operating costs compress and free‑cash flow expands.
  
• Risk watch: Keep an eye on any forward‑looking cost guidance in the next earnings release and on the timing of Tier‑One project commissioning; a delay could temporarily blunt the cost‑improvement trend.
  

Overall, the operating‑cost outlook is positive—higher volumes and a disciplined project pipeline should keep Barrick’s cost curve flat to declining, supporting a bullish bias on the stock for the remainder of 2025.