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Barrick Gold Corporation

Barrick to sell part of Chilean mine in retreat from copper – by Rachelle Younglai (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.

Barrick Gold Corp. plans to sell part of its prized Chilean copper mine, in a move to reduce its $13-billion (U.S.) debt burden. The partial sale of Zalidvar will crimp Barrick’s cash flow at a time when it is dealing with a slump in copper and gold prices.

But Zaldivar, which used to be called the Andean ATM because it generated so much cash, is expected to attract top bids and help Barrick strengthen its finances under a revitalization plan laid out by chairman John Thornton.

“Potential buyers have expressed a strong interest,” Barrick said in a statement announcing its quarterly results.

The world’s biggest gold producer plans to cut its debt by $3-billion this year and said “no priority is more important than restoring our balance sheet.” The Toronto company has already put its Australian and Papua New Guinea mines up for sale. The partial sale of Zaldivar is a major step away from the copper business for Barrick.

The miner had tried to diversify further into copper with its ill-timed $7-billion acquisition of copper company Equinox Minerals, a purchase that it has written down completely and helped create Barrick’s debt problems.

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Barrick Gold faces shareholder wrath over pay hikes at annual meeting Tuesday – by Lisa Wright (Toronto Star – April 27, 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.

Toronto-based mining giant’s board of directors in hot water over ‘exorbitant’ executive compensation plan.

Barrick Gold Corp. is in for a showdown Tuesday at its annual meeting in Toronto amid investor blowback over its controversial executive pay scheme that includes a 35 per cent salary hike for its board chairman.

The Canada Pension Plan Investment Board, the country’s largest pension fund manager, joined three other big pension funds Friday in saying it too will vote against the Toronto mining giant’s executive compensation plan awarding John Thornton $12.9 million.

The CPP Investment Board also said it plans to withhold support from Brett Harvey, one of Barrick’s board members and the chair of its compensation committee, which approved the 2014 pay hikes for Barrick’s top brass in a year when shares plunged 33 per cent and the miner lost $2.91 billion.

“We continue to be concerned with the company’s practice of granting outsized awards on a largely discretionary basis, which we believe is inconsistent with the governance principle of pay-for-performance,” said the CPPIB in a statement.

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UPDATE 3-Barrick will not suspend copper mine as Zambia backs down on royalties – by Chris Mfula (Reuters U.S. – April 23, 2015)

http://www.reuters.com/

LUSAKA, April 23 (Reuters) – Barrick Gold Corp, the world’s biggest gold producer, said on Thursday it will not suspend operations at its Lumwana open-pit copper mine in Zambia now that the country’s government has reduced mining royalties.

Zambia’s cabinet set the royalty tax rate for open-pit and underground mining at 9 percent on Monday. The corporate income tax rate will be 30 percent and the mineral processing tax rate will be 35 percent when the law takes effect on July 1.

“We appreciate the leadership and engagement of President (Edgar) Lungu and the government of Zambia on this matter,” Barrick Co-President Kelvin Dushinsky in a statement. “While Lumwana still faces challenges, in light of the government’s recent announcement we intend to continue operations at this time” The changes are yet to be approved by the parliament in Africa’s second-largest copper producer, but are expected to receive support from the assembly.

Zambia decided in January to increase royalties for open pit mines to 20 percent from 6 percent and raise rates for underground mines to 8 percent from 6 percent. The move rattled unions and mining companies and forced the government to review the plan.

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Company Document: Barrick’s new compensation plan rewards long-term performance

http://www.barrick.com/

ISS and Glass Lewis have recommended voting against Barrick’s Say on Pay proposal. We have received considerable support for our compensation system in other quarters, and we want to explain the system in general and the way in which we apply it to the Executive Chairman’s compensation in particular.

Barrick’s new leadership has designed a compensation system that restores the culture that drove the company’s initial success and ensures a focus on creating long-term value. We talked to current long-term owners and companies outside of our peer group. We weighed the critique of short-term stock-based compensation by influential author and former dean of the Rotman School of Management, Roger Martin, in his groundbreaking work Fixing the Game.

We considered McKinsey & Company’s finding that more than 50% of a typical company’s value is created by activities that will take place three or more years in the future. And we considered the findings of a recent survey in the Financial Analysts Journal that reported 78% of executives would improve quarterly earnings even if their actions destroyed long-term value. As Dominic Barton and Mark Wiseman, two of Canada’s most respected business leaders on the world stage, recently argued in the Financial Times:

“The biggest financial rewards should be reserved for managers who deliver long-term value, not just a quick pop in the stock.” They noted that on average, 74% of fund managers are compensated in cash, tied to outperforming an annual stock market benchmark.

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UPDATE 2-CPPIB joins chorus against Barrick’s executive pay structure – by Euan Rocha (Reuters U.S. – April 24, 2015)

http://www.reuters.com/

(Reuters) – The Canada Pension Plan Investment Board, the country’s largest pension fund manager, on Friday joined other investors opposing Barrick Gold Corp’s executive compensation schemes, arguing the company’s pay awards were “outsize” and unrelated to performance.

Toronto-based CPPIB said it plans to come out against the advisory vote on executive compensation that Barrick will be having at its annual shareholder meeting next week.

It also said it plans to withhold support from Brett Harvey, one of Barrick’s board members and the chair of its compensation committee. CPPIB own roughly 8.1 million Barrick shares, or less than a percent of the company’s outstanding stock.

“We continue to be concerned with the company’s practice of granting outsized awards on a largely discretionary basis, which we believe is inconsistent with the governance principle of pay-for-performance,” said CPPIB in a statement.

Last week, two smaller Canadian pension funds, the British Columbia Investment Management Corp (BCIMC) and the Ontario Teachers’ Pension Plan Board, said they plan to withhold support from Barrick’s entire board in light of their concerns with Barrick’s executive compensation package.

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Barrick shareholders urged to vote ‘no’ on John Thornton’s ‘excessive’ pay – by Rachelle Younglai (Globe and Mail – April 10, 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.

An influential proxy adviser urged shareholders to oppose Barrick Gold Corp.’s compensation plans, saying it has concerns about chairman John Thornton’s “exorbitant” pay package.

Barrick increased Mr. Thornton’s compensation 36 per cent to $12.9-million (U.S.) for last year, citing his plans to improve the miner’s performance by slashing debt and focusing on its gold assets in the Americas.

“It comes as a considerable surprise that the company has once again decided to reward Mr. Thornton with such a generous pay package,” Glass Lewis & Co. said in a note released ahead of the miner’s annual meeting April 28. “We … consider the ongoing compensation arrangement with its chairman to be excessive and extremely risky, particularly given the company’s track record of exorbitant pay packages for Mr. Thornton,” Glass Lewis said.

A key Barrick shareholder agreed Mr. Thornton’s compensation was inappropriate. “I don’t know why he couldn’t freeze his salary,” said Seymour Schulich, a prominent Canadian businessman who owns 15-million shares of Barrick.

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Taking a closer look at mining’s economic impact in Elko, Nevada (Barrick Beyond Borders – April 08, 2015)

http://barrickbeyondborders.com/

There are 670 mining vendors in Elko County alone, according to the Nevada Mining Association. At 53,000, the county’s population has climbed 7.5 percent since 2010 and 15 percent since 2002. Between 2003 and 2013, the gold-mining industry added 3,600 jobs across Elko, Lander, White Pine and Eureka Counties. Another 1,360 mine industry support jobs were added during the same period.

According to the U.S. Bureau of Labor Statistics, Nevada’s unemployment rate is 7.1 percent as of October 2014. According to the same source, Elko County’s unemployment rate is 4.4 percent as of September 2014, down from 6.3 percent in February of 2014.

Below are a few vignettes that offer snapshots of mining’s impact in this Nevada community.

A carnival-like atmosphere

A new store opening isn’t a major event in big cities, but it is in rural America. So when a Jo-Ann Fabrics opened in Elko in late 2011, the local radio and television stations were both on hand to cover the event and so, it seemed, was half the population of northeast Nevada. That may be a slight exaggeration. But the new Jo-Ann’s in the Elko Junction Shopping Center did enjoy the largest grand opening in the history of the company. Within two months, a Rue21 and Famous Footwear had opened at Elko Junction and also reported record grand openings.

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Barrick open to sell-offs and joint ventures in debt drive – by James Wilson (Financial Times – April 5, 2015)

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

Barrick Gold is open to a wide range of asset sales and joint ventures as it tries to cut debt by $3bn and rebuild its reputation with investors, its chairman has told the Financial Times.

In his first interview since taking over as chairman almost 12 months ago, John Thornton, pictured below, said he could imagine Barrick ceding operational control of some assets — for example to Mick Davis, the former Xstrata chief executive who plans to re-enter the mining sector at the head of a private equity vehicle.

Barrick would also bring long-term investors into a group of its mines as minority partners, Mr Thornton said.

“There is a lot of incoming inquiries . . . of all kinds of stripes and sizes. We feel confident about hitting the $3bn number,” he said.

Mr Thornton’s comments show the range of options being considered to turn round Barrick, still the world’s largest gold miner by volume but one of the worst-performing large miners of the past two years. Barrick, which has a $13bn market capitalisation, has been hit by steep falls in the price of the precious metal and has suffered billions of dollars of writedowns since 2012 on poor acquisitions and stalled projects.

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Barrick Gold hires John Baird, Newt Gingrich – by Rachelle Younglai (Globe and Mail – March 27, 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.

Barrick Gold Corp. has tapped former foreign affairs minister John Baird and former top U.S. lawmaker Newt Gingrich to serve on its advisory board, the company said in regulatory filings.

Mr. Baird and Mr. Gingrich, a former Republican speaker of the U.S. House of Representatives, will join other political heavyweights including former Canadian Prime Minister Brian Mulroney on the miner’s international advisory board.

The board meets once a year and gives advice to the world’s biggest gold producer, which has operations in the Americas, Africa and Australia.

“The role of the board is to provide advice on geopolitical and other strategic issues that affect our business,” a company spokesman said. “Both Mr. Baird and Mr. Gingrich bring with them excellent credentials and experience in this regard,” he said. Mr. Mulroney chairs the board, which also includes former U.S. and German defense officials and a former prime minister of Spain.

No compensation details for Mr. Baird and Mr. Gingrich were disclosed in the filings.

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[Barrick Gold] Unprecedented sage grouse protection deal signed in Nevada – by Scott Sonner (Washington Times – March 26, 2015)

http://www.washingtontimes.com/

Associated Press – RENO, Nev. – An unprecedented attempt to protect sage grouse habitat across parts of more than 900 square miles of privately owned land in Nevada will begin under a deal Thursday involving the federal government, an environmental group and the world’s largest gold mining company.

The agreement comes as the U.S. Fish and Wildlife Service approaches a fall deadline for a decision on whether to protect the greater sage grouse, a bird roughly the size of a chicken that ranges across the West, under the Endangered Species Act.

Commercial operations, including mining companies and oil and gas producers, are entering into such deals in an effort to keep the bird off the threatened or endangered list because the classification would place new restrictions on their work.

The deal involves Barrick Gold Corp., The Nature Conservancy and the U.S. Interior Department’s Bureau of Land Management and Fish and Wildlife Service. It establishes a “conservation bank,” providing the mining firm credit for enhancing critical habitat, in exchange for flexibility in future operations. It aims to preserve and restore more habitat than is lost through development while at the same time providing Barrick with more certainty as it maps out new mining plans.

“This is the kind of creative, voluntary partnership that we need to help conserve the greater sage grouse, while sustaining important economic activities on western rangelands,” Interior Secretary Sally Jewell said.

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Barrick Gold Mints 35 Partners as It Seeks Revitalization – by Liezell Hill (Bloomberg News – March 26, 2015)

http://www.bloomberg.com/

(Bloomberg) — Barrick Gold Corp. Executive Chairman John Thornton wants his executives to have skin in the game. To do that, he’s rolling out a Wall Street-style partnership to give them significant stakes in the world’s largest gold producer.

Barrick this month named its inaugural 35 partners, a group that includes mine managers as well as the most senior officers at its Toronto headquarters, according an internal memo obtained by Bloomberg.

Partners will receive long-term incentive-based pay in the form of restricted stock that can’t be sold until retirement or departure. The shares will comprise more than 50 percent of total compensation for the six most senior executives in the partnership if targets are met, and after five years all the partners will be required to hold stock worth multiples their base salaries, according to Andy Lloyd, a Barrick spokesman.

A partnership model is something more typically associated with financial services, according to Steve Chan, a consultant who advises on corporate pay. Its adoption by Thornton, a one-time senior banker at Goldman Sachs Group Inc., is indicative of his intentions to return Barrick to its entrepreneurial roots after becoming weighed down by debt amid falling gold prices.

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Barrick Gold eyes sale of key Chilean copper mine – by James Wilson (Financial Times – March 15, 2015)

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

Barrick Gold is eyeing the sale of one of its “crown jewels”, a Chilean copper mine, as the Canadian miner tries to meet an ambitious debt reduction target to help restore its lustre for investors.

Bankers and mining executives said the Chilean copper mine, one of Barrick’s key assets, would be of potential interest to a number of private equity vehicles, including Mick Davis’s X2 Resources. Mr Davis, one of the best-known mining executives, headed Xstrata before its 2012 sale to Glencore. X2 has raised $5.6bn and is hunting for mining deals.

A sale of the Zaldívar mine by Barrick, which mines more gold annually than any other company, could be expected to realise more than $1.5bn. It would be one of the most eye-catching mine sales since the sector’s sharp downturn, showing how companies that are under fire are having to respond to falling commodity prices and protect balance sheets by selling choice assets.

While X2 would be interested in Zaldívar, other interest could come from Chinese groups looking to acquire resources, one banker said. China’s Minmetals bought Las Bambas, a former Xstrata project that is one of the largest copper mines under construction, last year.

Teck, the Canadian mining group, is also on the hunt for copper assets, its chief executive said this month. X2 declined to comment.

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