Barrick rises as FT reports Elliott building large stake

Barrick Mining (B) +2.5% pre-market Tuesday following a Financial Times report that Elliott Management has built a large stake in the company, as the world's second-largest gold producer has struggled to capitalize on the metal's rally.

Elliott’s stake would rank it among Barrick's (B) 10 largest investors, which would mean the hedge fund's holding totals at least $700 million, although the exact size of the stake is not known, the report said.

Barrick's (B) share price performance has lagged peers even as bullion has reached record highs, and the company has faced several setbacks, including losing control of a key mine in Mali, but Elliott reportedly is encouraged by the idea that Barrick could split into two companies, separating its higher-growth North American operations from its mines in riskier regions across Asia and Africa.

Barrick's (B) board recently discussed splitting the business, as well as outright sales of its African and Pakistan assets, Reuters reported last week.

Elliott, regarded on Wall Street as the most formidable activist investor, is familiar with the mining sector, as it holds a sizable stake in Anglo American, which recently agreed to merge with Teck Resources, and previously targeted Kinross Gold, leading it to boost its stock buyback program.