By Penny Laneford
Skillings Mining Intelligence Staff
ELKO, Nev. : Barrick Gold Corp. has spent the better part of two years pitching investors on the “generational” potential of its Fourmile project in Nevada, framing it as the crown jewel of a planned North American asset spinoff. But a multi-billion dollar anchor is attached to the project that neither Barrick nor the broader market has fully accounted for until now.
A legacy royalty agreement held by Teck Resources Ltd., valued by analysts at billions of dollars, threatens to fundamentally alter the economics of Fourmile. The undisclosed arrangement, which dates back to a 2011 filing in Eureka County, grants Teck a massive net profits interest (NPI) in the project. For Barrick, the timing couldn’t be worse. As the company prepares for a high-stakes IPO of its North American holdings, this “hidden” liability is surfacing just as Newmont Corp. intensifies its own legal and operational pressure on the project.
The strategic calculus here isn’t subtle: Barrick is looking for a premium valuation for its Nevada pipeline, but Teck effectively holds the keys to a significant portion of the cash flow.
The 15% Stranglehold: Breaking Down the Math
The royalty in question isn’t a standard 1% or 2% Net Smelter Return (NSR) that most majors can absorb without a blink. According to internal documents and recent analysis by Scotia Capital and RBC Dominion Securities, Teck holds a 10% net profits interest in Fourmile. That interest isn’t static. Once the project produces 6 million ounces of gold: a milestone easily within reach given the current resource estimates: the royalty climbs to 15%.
Scotia Capital currently values the Fourmile project at approximately $15 billion. If Teck’s royalty is applied to the life-of-mine models, it could drain between $100 million and $200 million in annual cash flow from Barrick’s books. In a high-gold-price environment, those numbers get even more aggressive.
With gold prices hovering near $4,800 per ounce in early 2026 and Barrick’s estimated all-in sustaining costs (AISC) at Fourmile sitting between $650 and $750 per ounce, the margins are massive. Ironically, those margins are exactly what makes Teck’s NPI so punishing. Unlike an NSR, which is a top-line tax on revenue, an NPI takes a bite out of the actual profit. At 15%, Teck isn’t just a royalty holder; they are a silent partner with none of the capital risk.
A Ghost from the Placer Dome Era
How did Barrick end up in this position? This is a “chickens-coming-home-to-roost” scenario. The royalty agreement stems from a 2011 arrangement between Placer Dome and Cominco, the predecessor to Teck Resources. When Barrick acquired Placer Dome, it inherited the obligation. For years, Fourmile was an exploration-stage asset, a “maybe” in the distant future.
Now, Fourmile is a “must-have.” It represents roughly 19% of Barrick’s net asset value (NAV). Analysts note that the royalty could reduce the project’s total worth by at least 10%. That’s a $1.5 billion haircut on the IPO’s primary valuation driver.
“Barrick has touted Fourmile as a standalone success, separate from the Nevada Gold Mines (NGM) joint venture,” says an analyst familiar with the Eureka County filings. “But you can’t disrupt geology, and you certainly can’t ignore a filed deed. This royalty is an encumbrance that sophisticated IPO investors will price in immediately.”
The Newmont Factor: A Two-Front War
The Teck royalty isn’t Barrick’s only headache in Nevada. Newmont, which owns 38.5% of the Nevada Gold Mines JV, recently issued a default notice against Barrick regarding Fourmile. The dispute centers on “resource diversion.” Newmont alleges that Barrick is prioritizing the development of Fourmile: which Barrick owns 100%: over JV assets that would benefit both companies.
The friction is palpable. Barrick intends to integrate Fourmile into the NGM complex eventually, but only after a feasibility study is complete. This delay allows Barrick to keep 100% of the early-stage upside: or at least it did, until the Teck royalty came to light.
If Fourmile is folded into NGM, Newmont faces a brutal choice: pay a massive cash sum to maintain its 38.5% stake in a project now burdened by a 15% Teck royalty, or accept dilution. Given Newmont’s current focus on tier-one assets, they are unlikely to go quietly. The default notice is a shot across the bow, signaling that any attempt by Barrick to spin off Fourmile as a “clean” asset will be met with litigation.
2026 Outlook: The IPO Clock is Ticking
Barrick remains publicly committed to its North American spinoff, aiming for a late 2026 or early 2027 listing. However, the discovery of the Teck royalty complicates the narrative.
Key milestones for Fourmile include:
- Late 2026: Target for decline construction.
- 2027-2029: Feasibility studies and environmental permitting.
- 2030: Expected initial production.
Those timelines are long. The markets, however, are focused on the “now.” Investors in 2026 are looking for transparency in resource valuations. For more on how major producers are handling these long-term valuation shifts, see our 2025 review of global mining shifts.
Teck, for its part, has remained quiet. They don’t need to speak. Their position is secured by a decade-old filing. For Teck, Fourmile represents a “risk-free” billion-dollar windfall that bolsters their own balance sheet as they pivot toward copper and critical minerals.
The Valuation Trap
What happens next? Barrick likely has three options, none of them particularly pleasant:
- Buy Out the Royalty: Barrick could offer Teck a massive one-time payment to extinguish the NPI. Given Fourmile’s $15 billion valuation, Teck would likely demand upwards of $2 billion to walk away.
- Proceed with the Spinoff: Barrick could list the assets with the royalty disclosed, accepting a significantly lower IPO price and a “damaged” valuation for its premier project.
- Settle with Newmont: Barrick could bring Fourmile into the NGM joint venture earlier than planned, sharing the royalty burden (and the profit) with Newmont to end the legal hostilities.
“There’s not enough gold to satisfy everyone’s appetite here,” notes one institutional investor. “Between the Teck NPI, the Newmont JV rights, and Barrick’s own overhead, the ‘generational’ profit of Fourmile is being sliced thinner by the day.”
This is the reality of modern mining in Nevada. The easy ounces are gone, and what’s left is buried under layers of legal complexity and legacy agreements. Barrick may have the gold, but Teck has the paper. And in 2026, the paper might be worth more than the rock.
For continued coverage of the Nevada gold sector and its impact on the global market, stay tuned to our daily updates.
