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Barrick Gold Corporation

Barrick Gold makes big changes to become a smaller company – by Joe Castaldo (Canadian Business Magazine – July 3, 2015)

http://www.canadianbusiness.com/

Long-suffering shareholders see potential as the company focuses on shedding debt and getting back to gold

It’s quiet at the headquarters of Barrick Gold in Toronto. On a Wednesday afternoon in May, all that can be heard is the soft hum of the ventilation system. A few years ago, around 500 people filled the office, overseeing mining operations that spanned the globe. Today, there are just 140 employees responsible for a much smaller geographical footprint. And that footprint might shrink over the coming year.

For long-suffering Barrick shareholders, this is welcome news. “We’re taking Barrick back to the way it was 15 years ago,” says Kelvin Dushnisky, the company’s co-president. Back then, Barrick was not a bloated organization that had lost investor confidence, nor was it facing a mountainous $13-billion debt in a depressed gold market. Since 2012, Barrick’s share price has fallen by roughly 70%.

While gold prices are a long way from where they were at the height of the 2000s commodities boom—a reality that’s hurt many miners—Barrick’s wounds are mostly self-inflicted. In 2011, founder and chairman Peter Munk pushed the company to spend billions on an underperforming copper mine in Zambia. Barrick also botched the development of what was to be a monster gold mine on the border of Chile and Argentina called Pascua-Lama. These two headaches have cost Barrick about $15.9 billion over the past few years, according to an analyst at Macquarie Group.

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For risk-wary gold miners, small is beautiful – by Susan Taylor (Reuters U.S. – June 5, 2015)

http://www.reuters.com/

TORONTO – Bigger isn’t better for the world’s gold miners, who are increasingly making “bite-sized” developments that carry less risk of budget disasters and fewer of the political and environmental disputes that have derailed mega-mines in recent years.

Newmont Mining (NEM.N) is a prime example of how companies are responding to bleak industry conditions by building mines on a smaller scale than in the past, with the price of gold down almost 40 percent from its peak in 2011 and banks avoiding the sector.

The cautious approach will likely persist even if conditions improve, with miners increasingly teaming up on big, complex projects to share costs, expertise and risk, senior mining executives and industry watchers said.

“If there’s going to be something go wrong, you’d rather it go wrong after you’ve spent $1 billion than $3 billion or $4 billion,” said Goldcorp Inc (G.TO) Chief Executive Chuck Jeannes. Goldcorp, the world’s most valuable gold miner by market capitalization, owns stakes in a number of joint-ventured assets such as the Alumbrera gold mine in Argentina and the Pueblo Viejo gold mine in the Dominican Republic.

The price of gold has fallen as concerns about inflation receded and the U.S. dollar rose against most major currencies. Gold is often used as a hedge against inflation, as prices typically rise when the dollar weakens.

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New mine in an old pit: Barrick begins mining at Arturo – by Marianne Kobak McKown (Elko Daily Free Press – June 4, 2015)

http://elkodaily.com/

CARLIN – An old mine site has been reborn.

Barrick Gold Corp. began mining in its Arturo Mine this year. The new operation is located in the former Dee Pit, which is about 45 miles northwest of Elko. Barrick owns 60 percent of the project and Goldcorp owns the other 40 percent.

The Bureau of Land Management issued the mine’s record of decision May 9, 2014 and construction on the project began the end of 2014.

The mine will be mined in three phases, but it is starting in Phase 2 first, said Jerry Johnson, open pit technical services superintendent. Phase 2 is predominantly refractory ore and it will be sent to Goldstrike’s roaster and autoclave.

“It is about 90 percent refractory and about 10 percent oxide mill,” Johnson said. “It’s a smaller pit. It’s about 107 million total tons. It will be about 800 feet deep when we are done with it and about a half a mile in diameter, so significantly smaller than the Goldstrike Pit.”

He said the phases were named before all the drilling was completed, which is why Phase 2 will be mined before Phase 1. Mining with the 4100 shovel started on March 26. “The active shovel bench is just a wee bit of a highwall,” Johnson said.

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Can John Thornton save Barrick Gold? – by Racheelle Younglai (Globe and Mail/Report On Business Magazine – May 29, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

A floor of empty cubicles is what’s left of Barrick Gold Corp.’s boom years. A lone whiteboard leans against a chair, the last vestige of hundreds of people who worked at the miner’s Toronto headquarters when gold was hurtling toward $1,900 an ounce (all currency in U.S. dollars unless otherwise noted).

The world’s biggest gold producer—one of Canada’s few global champions and formerly the envy of the mining industry—is on a desperate mission to recapture its magic after years of dismal results, humiliating missteps and rock-bottom investor confidence. Its share price on the NYSE is not much higher than where it was two decades ago.

The three-year slump in bullion prices to around $1,200 an ounce has devastated the industry. Mines that used to be profitable are now bleeding cash. In these conditions, Barrick’s every blunder—an ill-timed foray into copper, an attempt to build a mountaintop mine in the Andes—is exposed on its balance sheet, particularly in one remarkable number: Debt stands at $13 billion.

The company is vowing to cut that figure by at least $3 billion by the end of this year, even if it has to sell an heirloom or two to get there. A slew of top-rank Barrick veterans are gone and the company’s charismatic founder, Peter Munk, retired as chairman in April, 2014.

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Barrick investors welcome Chinese tie-up, debt reduction moves – by Nicole Mordant and Euan Rocha (Reuters U.S. – May 26, 2015)

http://www.reuters.com/

VANCOUVER/TORONTO – Barrick Gold Corp’s first step to long-promised partnerships with China, as well as progress in reaching an ambitious debt-cutting goal, are turning skeptical investors warmer toward the world’s biggest gold miner.

Barrick said on Tuesday it would sell a stake in its Porgera mine in Papua New Guinea mine to China’s Zijin Mining Group, and form a strategic partnership with Zijin. The moves marked an initial push in Executive Chairman John Thornton’s plan to forge closer ties with China, the world’s biggest producer and consumer of gold.

The former Goldman Sachs executive’s radical overhaul since taking Barrick’s reins a year ago, including eliminating the position of chief executive, had raised eyebrows among investors. Many also complained about his outsized signing bonus, lack of access, and most recently his 36 percent pay rise.

But a clearer strategy unveiled in February to slash Toronto-based Barrick’s mountain of debt, while seeking close links with China, looks to be winning approval.

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Barrick Gold Corp, Ivanhoe Mines Ltd sell stakes to China’s Zijin in Papua New Guinea, Congo mines – by Peter Koven (National Post – May 26, 2015)

The National Post is Canada’s second largest national paper.

Canadian miners Barrick Gold Corp. and Ivanhoe Mines Ltd. have both struck deals with Chinese miner Zijin Mining Group Co., which is investing a total of US$710 million in their projects.

Zijin, one of China’s largest gold and copper producers, will buy half of Barrick’s 95 per cent stake in the Porgera gold mine in Papua New Guinea for US$298 million. And it will buy just under half of Ivanhoe’s 95 per cent stake in the Kamoa copper project in the Democratic Republic of Congo for US$412 million.

The two transactions are the direct result of work by John Thornton and Robert Freidland, the respective chairmen of Barrick and Ivanhoe. Both men have very deep business ties to Asia.

Thornton, who became Barrick’s chairman last year, has put a priority on forming partnerships with Chinese companies, and negotiations with Zijin have been going on for several months. There were also talks around Zijin becoming a partner on the failed Pascua-Lama project, though no agreement has been struck to date.

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NEWS RELEASE: Barrick Announces Strategic Partnership with Zijin Mining Group

All amounts expressed in US dollars unless otherwise indicated.

TORONTO, May 26, 2015 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or “the company”) today announced that it has formed a strategic partnership with leading Chinese mining company Zijin Mining Group Co., Ltd (“Zijin”).

As a first step, Zijin will acquire 50 percent of Barrick (Niugini) Limited (“BNL”), the company which owns 95 percent of and manages the Porgera Joint Venture gold mine in Papua New Guinea. In addition, Barrick and Zijin have signed a long-term strategic cooperation agreement which outlines the intent of both companies to collaborate on future projects and joint investments, leveraging the strengths of each company.

“A twenty-first century mining company with global reach and the intention to become an industry leader must, by definition, have a distinctive relationship with China. This is particularly true in our industry, where China has become both the largest producer and consumer of gold, and a major source of capital and expertise for the mines of the future,” said Barrick Chairman John L. Thornton. “Our partnership with Zijin is the first step in a long-term strategic relationship with one of China’s leading mining companies—a multi-faceted partnership that will provide significant opportunities to work together on an ongoing basis as we continue to create value for our respective owners.”

“A strategic partnership with Barrick is an excellent fit for Zijin and a powerful combination as we look to expand our business globally outside of China. Our companies have complementary expertise and experience and share a common vision for creating long-term value for our owners,” said Zijin Chairman Chen Jinghe.

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UPDATE 2-Barrick sells Australian Cowal gold mine to Evolution for $550 mln – by Sam Forgione and Sonali Paul (Reuters U.S. – May 25, 2015)

http://www.reuters.com/

NEW YORK/MELBOURNE, May 25 (Reuters) – Barrick Gold , the world’s top gold producer, has agreed to sell its Cowal mine to Evolution Mining for $550 million in a deal that will turn Evolution into Australia’s second largest producer of the precious metal.

The deal gives Evolution a large, low-cost mine that will boost its output to around 800,000 ounces a year, around one-third the output of top Australian producer Newcrest Mining .

“This is a truly transformational acquisition for Evolution,” Executive Chairman Jake Klein said after the deal was announced on Monday. “This is the high quality asset we have been looking for to cornerstone our business.”

Barrick put Cowal up for sale along with its Porgera mine in Papua New Guinea, among other assets, in an effort to cut debt by $3 billion by the end of this year.

Analysts congratulated Evolution for snaring Cowal for well below the $650 million price tag it had been expected to fetch.

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Gold Fields Said to Be Among Final Bidders in Barrick Mine Sale – by David Stringer and Brett Foley (Bloomberg News – May 22, 2015)

http://www.bloomberg.com/

Gold Fields Ltd. is among final bidders competing to acquire a $400 million Australian mine from Barrick Gold Corp., people with knowledge of the matter said.

The Johannesburg-based producer and China’s Zijin Mining Group Co. submitted final offers for the Cowal gold mine in New South Wales state, according to the people, who asked not to be identified as the details are private. They are competing with local suitors Evolution Mining Ltd. and Independence Group NL, which also submitted binding bids, they said.

Barrick, the world’s biggest gold miner, said last month it has fielded interest for mines it’s seeking to divest in Australia, Papua New Guinea and Chile. The Toronto-based company plans to reduce net debt by at least $3 billion this year, partly by selling the assets and cutting staff at its head office.

Zijin Mining has also expressed interest in Barrick’s Porgera mine in Papua New Guinea, the people said. Representatives for Gold Fields, Independence Group and Evolution declined to comment, while spokesmen for Barrick and Zijin didn’t immediately respond to calls and e-mails seeking comment.

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Barrick Beyond Borders: There’s a first time for everything [Cyanide free gold]

http://barrickbeyondborders.com/

Barrick produced the first of millions of ounces of gold at its Goldstrike mine using patented technology that will save jobs and allow it to continue to contribute funds to the state of Nevada

In late November 2014, the Goldstrike mine poured a small but significant bar of gold. At 107 ounces, the pour amounted to just one-eighth the size of a typical doré gold bar, but it marked the first time the mine had produced gold using its patented thiosulfate processing method. In fact, it marked the first time any company in the western world had successfully produced gold using thiosulfate.

Long viewed as a potential alternative to cyanide, which is typically used to recover gold that is trapped inside ore, thiosulfate is a difficult chemical to master. Barrick spent more than two decades perfecting its thiosulfate processing method and relied on an unmatched level of scientific and technological expertise.

“It’s the culmination of years of hard work and a good example of how our partnership culture is manifesting itself on the ground,” says Goldstrike General Manager Andy Cole. “This was a huge initiative, and it would not have succeeded if it weren’t for the collaboration, trust and accountability that developed between our project team, the construction group and the Goldstrike operations team.”

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Barrick Gold hires BlackRock fund manager to help with turnround – by James Wilson (Financial Times – May 1, 2015)

http://www.ft.com/intl/companies/mining

Barrick Gold, the world’s largest gold producer by output, is hiring one of the UK mining sector’s best known fund managers as part of executive chairman John Thornton’s push to improve the struggling company.

Catherine Raw is joining Barrick’s leadership team from BlackRock, the asset manager, where she was co-head of its largest mining fund and highly critical of the performance and strategy of most of the world’s largest gold miners. The sector needed “to start seeing some really painful decisions being made”, Ms Raw said in December.

Barrick has shaken up its top ranks since Mr Thornton, a former Goldman Sachs banker, took over as executive chairman last year from founder Peter Munk. The Canadian miner has come under fire from investors after three consecutive years of net losses driven largely by writedowns on misfiring projects and acquisitions.

Mr Thornton — who pledged to review Barrick’s management pay policy after it was rejected at an advisory vote at this week’s annual shareholder meeting — has repeatedly said the company needs to do a better job of allocating investment to projects.

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Barrick’s new gold discovery – by Kip Keen (April 29, 2015)

http://www.mineweb.com/

Barrick looks to have found another multi-million ounce gold deposit.

In the hands of the world’s biggest gold miner, a decent, even pretty big, gold discovery doesn’t make a lot of waves. When you churn out 6 million ounces gold or so a year you don’t get a lot of recognition for the pre-resource stuff especially. Firstly, you can’t put a dollar figure or cash flow analysis to it that carries even a faint promise of being accurate given the vagaries of deposit development – including unclear tonnage and grade, metallurgical questions, infrastructure issues, potential people problems, and permitting, and so on.

The list goes on. And secondly, for a Barrick, with fairly deep gold reserves already, and yet also a high rate of reserve depletion, absolutely speaking, it’s both hard to impress the market and to keep up with reserve replacement even with new discoveries. You’re mostly measured by your best existing and operating mines, not potential greenshoots in the field. Fair enough.

But still. Gold discoveries, especially of multi-million ounce deposits, with early indications they may work as a mine, are pretty damn rare. So it’s hard not to at least give kudos when they’re made. Barrick deserves some this week. A couple days back Barrick reported first drilling results on its Alturas project in Chile. It’s clearly shaping up to be one of the larger gold discoveries in recent years.

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Barrick to revamp executives’ pay after shareholder backlash – by Lisa Wright (Toronto Star – April 29, 2015)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

John Thornton told the company’s annual shareholder meeting that 75% of the votes were cast against compensation scheme.

Embattled Barrick Gold Corp. chairman John Thornton has promised to overhaul the miner’s controversial executive compensation system that hiked his pay by 35 per cent to $12.9 million (U.S.).

But at the annual meeting Tuesday, where shareholders voted overwhelmingly against executive salary increases, Thornton didn’t offer to hand any of it back, underscoring that he is personally tied to the future fortunes of the company since he bought half of his 1.4 million Barrick shares “with my own money.”

“We have heard you loud and clear,” he said, after early returns suggested 75 per cent of shareholders did not support the pay packages.

“We take that feedback and we will go back and reform our system – and specifically how it relates to me,” Thornton assured the investor audience at the Metro Toronto Convention Centre.

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Corporate harassment, from exec compensation to diversity – by Terence Corcoran (National Post – April 28, 2015)

The National Post is Canada’s second largest national paper.

Annual shareholder meetings of major corporations have never been of much practical use to investors. Certain legal requirements are fulfilled, the CEO reviews the corporation’s affairs with great flair or thudding dullness, depending on personality. Questions are taken from shareholders, results of proxy votes announced, and then the chair invites everyone for light refreshments before declaring the meeting terminated.

That still happens, but meetings have also recently been hijacked by corporate governance activists who have turned many annual shareholder events into meaningless ideological skirmishes. First it was executive compensation issues, but diversity is rising fast through the activist network of corporate harassment.

The CIBC annual meeting last week in Calgary turned into a spring against the bank’s executive compensation regime, particularly money paid to former CEO Gerald McCaughey and former COO Richard Nesbitt. As part of the now mandatory but non-binding “say-on-pay” resolution, shareholders voted 57 per cent to 43 per cent against the bank’s approach to executive compensation.

Rebellion fever runs high in anticipation of the Barrick Gold annual meeting in Toronto Tuesday. A large say-on-pay vote against the corporation is expected, mostly from the government-backed institutional pension industry that has decided it doesn’t like the pay Barrick has awarded John Thornton, the man who succeeded Peter Munk as chair of the company.

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Gold sector CEO pay is through the roof – and it’s embarrassing – by Tim Kiladze (Globe and Mail – April 28, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Someone needs to break the bad news to gold miners: their party’s all but over. If they keep paying their chief executives handsomely, there’s no chance they’ll win back the global investors they sought for so long.

After peaking in 2011, the S&P/TSX Gold Index has been decimated, losing 63 per cent of its value. Miraculously, though, boards of directors have barely noticed. Which is why, even after tens of billions of dollars worth of writedowns and rounds of executive upheaval, the gold sector’s chief executives still get paid through the roof.

Barrick Gold Corp. is feeling the heat. Despite a share price that plunged by nearly one-third in 2014 – Barrick’s stock now trades at $15.52, a level not seen since last century – chairman John Thornton was handed a 36 per cent pay bump, bringing his total compensation to $12.9-million (U.S.).

If only it ended there. Barrick’s in the spotlight, but many of its rivals, such as Eldorado Gold Corp. and Yamana Gold Inc., are in the same boat.

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