Barrick rides the DeLorean – by Kip Keen (Mineweb.com – February 23, 2015)

http://www.mineweb.com/

Barrick’s quest for greater relevancy.

Under the heading “Taking Barrick ‘Back to the Future’” Barrick Gold touted a plan to transform itself into a leaner, meaner cash machine with management and operational changes along with debt reductions in its forth quarter overview. Most who were around in the 1980s will get the movie reference at play. Back to the Future was a trilogy of movies that features Marty McFly, played by Michael J. Fox, who rides a time machine built into a DeLorean DMC-12 car, famously featuring gull-wing doors, to make his and his family’s present better than the past.

The nut of the first and subsequent movies is that things have not turned out as they should have, or as McFly would have them turn out. The first movie is about McFly and Doc Brown, played by Christopher Lloyd, going back to the 1950s by accident, and then their subsequent attempts to get back to the future (i.e. the 1980s) harnessing the power of lightning to run the DeLorean which, depleted of fuel, needs lots of energy to time travel. In the process, McFly rights – or rewrites – history for his family.

He helps his Dad, in a moment of confrontation, upstage Biff and save Lorraine from the then teenage bully’s advances. Soon thereafter McFly returns to the future – or the present 1980s. And what he finds is nicer than what he previously knew. His dad is no longer a loser and his mum is happy. Biff is a deadbeat.

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Barrick goes back to mining roots with focus on gold – by Rachelle Younglai (Globe and Mail – February 20, 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. founder Peter Munk had a vision for his company. Barrick’s new chairman John Thornton has another one.

Less than a year on the job as chairman, Mr. Thornton appears to have killed Mr. Munk’s dream of turning Barrick into a giant diversified mining company, and plans to forge a deep business relationship with China are no longer on the table.

Instead, Mr. Thornton wants the world’s biggest gold producer to return to its roots when it was a nimble operator with an entrepreneurial spirit, a streamlined corporate structure and a pristine balance sheet that earned a top credit rating.

Barrick, like the rest of the gold industry, was forced to clamp down on expenses when bullion began plummeting in 2011. Under Mr. Munk and previous management, Barrick had started becoming leaner by selling and suspending expensive operations and shrinking production.

But Mr. Thornton suggested Barrick had lost its way over the past decade and is pushing the company back to its “original DNA.” Gone are the layers of managers between Barrick’s executives and the 19 mines that it operates. Barrick’s Toronto headquarters is now a skeleton crew of 150, compared with 500 in its heyday.

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Bad times for Canada’s big gold miners – by Lisa Wright (Toronto Star – February 20, 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.

Barrick, Goldcorp take massive Q4 writedowns amid weak gold prices.

Barrick Gold Corp. chairman John Thornton’s message to Bay Street came through loud and clear: he wants to take the world’s largest gold producer back to its roots as a smaller company with fewer mines and micro-managers — and hopefully return it to profitability.

To that end, the Toronto mining giant is slashing staff at headquarters by nearly half and selling two Asia-Pacific mines. It will be “laser focused” on reducing its debt by $3 billion this year amid rocky times in the mining industry and a weak gold price, he told analysts on a conference call Thursday.

It wasn’t a banner day for either of Canada’s two largest bullion miners, as Vancouver-based Goldcorp Inc. reported a loss of $2.4 billion (U.S.) in its latest quarter as it wrote down the value of its Cerro Negro mine in Argentina. Barrick also reported a massive $2.85 billion fourth-quarter loss due to an after-tax impairment charge on its soon-to-be closed Lumwana copper mine in Zambia and the Cerro Casale project in Chile.

Gold miners are struggling as the gold price has lost 35 per cent of its value since its peak of $1,900 (U.S.) an ounce in 2011 and as the industry suffers through a brutal downturn following a 13-year market rally.

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Barrick Gold Investors Get Answers as Thornton Outlines Strategy – by Liezel Hill (Bloomberg News – February 19, 2015)

http://www.bloomberg.com/

(Bloomberg) — Barrick Gold Corp. investors waiting to hear Chairman John Thornton’s plans for the world’s biggest gold producer finally have some answers.

Barrick will stay focused on gold and has no plans to diversify into other metals, Thornton said Thursday in his first appearance on a quarterly earnings call.

The chairman, who replaced Barrick’s founder Peter Munk in April, said he’s trying to go “back to the future,” returning the Toronto-based company to the nimble, entrepreneurial roots that first made it successful.

The last few years have been tumultuous for Barrick, with the departure of two chief executive officers, a sliding gold price and a tumbling share price. With shareholders looking for reassurance, at least two of them — ASA Gold & Precious Metals Ltd. and USAA Precious Metals & Minerals Fund — have complained that Thornton’s plans for the future weren’t clear.

“After having listened to the call, I do feel better about Barrick and its corporate strategy,” Diana Racanelli, a Toronto-based resources fund manager at Manulife Asset Management, said Thursday. “These have all been key issues that needed to be addressed.”

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Barrick Gold posts another big quarterly loss (Canadian Press/CTV News – February 19, 2015)

http://www.ctvnews.ca/

TORONTO — Barrick Gold Corp. (TSX:ABX), citing massive impairment charges on mine projects in Africa and Chile, has reported another multibillion-dollar net loss in its most recent quarter.

Canada’s second-largest gold miner by market capitalization says it net loss in the three months ended Dec. 31 was US$2.85 billion or US$2.45 per share, compared with a net loss of US$2.83 billion or US$2.61 per share in the same 2013 period when it had fewer shares.

Revenue was US$2.51 billion, down from US$2.94 billion as the company sold fewer ounces of gold — 1.57 million versus 1.83 million — at an average realized price of US$1,204 per ounce compared with $1,272 in the 2013 quarter.

The quarterly loss reflected the impact of US$2.8 billion in after-tax impairment charges primarily related to the Lumwana mine in Zambia (US$930 million) and the Cerro Casale project in Chile (US$778 million), the company said in an earnings report issued Wednesday after markets closed.

Fourth-quarter adjusted net earnings were US174 million or 15 U.S. cents per share, compared with US$406 million or 37 cents in the 2013 quarter. For the full year, Barrick recorded a net loss of US$2.91 billion or $2.50 per share, reflecting the impact of $3.4 billion in after-tax impairment charges. The full-year net loss in 2013 was US$10.37 billion or US$10.14 per share.

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Zambia’s tax regime keeps lid on First Quantum spending plans – by Geoffrey York (Globe and Mail – February 9, 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.

CAPE TOWN — With no sign of compromise from Zambia on a controversial royalty tax regime, First Quantum Minerals Ltd. says it will prolong its suspension of more than $1-billion in mining investment plans in the African country.

The Vancouver-based company, whose investments in Zambia include a majority stake in Africa’s biggest copper mine, is among the Canadian miners that were heavily affected by Zambia’s decision to triple its open-pit mining royalty rate to 20 per cent from 6 per cent last month.

Some analysts had predicted that Zambia might roll back some of the royalty hike after its presidential election last month, but government leaders are giving no hint of a reversal so far.

“They’re sticking to their guns,” Matt Pascall, operations director for First Quantum, said in an interview on Monday. “All the latest statements by the minister of finance, and even the president, indicate no change.”

First Quantum had planned an expansion of its biggest Zambian asset, the Kansanshi copper mine, and a smelter, but those investments are now “still on hold,” Mr. Pascall said.

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FORD MOTOR COMPANY NEWS RELEASE: WHY BARRICK GOLD CORP. HAS ORDERED 35 ALL-NEW FORD F-150S AFTER SECRETLY TESTING F-150 ALUMINUM CARGO BOXES


 

FEB 2, 2015 | DEARBORN, MICHIGAN

  • Barrick Gold USA, one of three Ford customers chosen to blindly test two prototype F-150 pickups with experimental aluminum-alloy cargo boxes, has placed an initial order for 35 all-new 2015 F-150 trucks
  • Barrick testing helped improve the all-new, high-strength, military-grade, aluminum-alloy-bodied F-150 – the toughest, smartest, most capable F-150 ever
  • Barrick accumulated more than 100,000 miles on its two F-150 test vehicles, putting the trucks through the harshest challenges daily; workers would literally throw heavy pieces of equipment into the cargo bed, including large pumps, motors and specialty tools

After helping Ford torture test prototypes of aluminum pickup truck boxes, Barrick Gold USA is placing an initial order for 35 all-new F-150s – the toughest, smartest, most capable F-150 yet.

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Zambia pressed to reverse mining royalty hike – by Geoffrey York (Globe and Mail – January 12, 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.

JOHANNESBURG — Zambia’s government is under mounting pressure to reverse a royalty hike that could trigger thousands of layoffs at a copper mine owned by Barrick Gold Corp., but a rollback is unlikely until after an election this month, analysts say.

Trade unions, business groups and opposition politicians are pressing for a reversal of the sharp increase in the royalty rate on open-pit mining in Zambia. At least 12,000 jobs are in jeopardy across the mining sector in Africa’s second-biggest copper-producing nation, according to the Chamber of Miles of Zambia.

“It has created a lot of anxiety among Zambian workers,” said Nevers Mumba, one of the three leading presidential candidates in the Jan. 20 election. “Other investors could pull out of Zambia,” he said in an interview.

“There’s a risk of a run in that sector. I’m concerned about the ripple effect – it could have a terrible impact.” Under the new tax regime, which took effect on Jan. 1, the royalty on open-pit mining has tripled to 20 per cent, compared to the previous rate of 6 per cent.

Barrick and First Quantum Minerals Ltd. are among the Canadian mining companies that will be heavily affected by Zambia’s higher royalty rates. Barrick and First Quantum are two of the biggest foreign investors and private employers in Zambia.

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Barrick Gold Corp comes under fire, cut to underperform in extensive analyst report – by Peter Koven (National Post – January 9, 2015)

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

Barrick Gold Corp. has received plenty of criticism from the investment community over the past few years, much of it deserved. But few have been as thorough and pointed as Macquarie Capital Markets analyst Ron Stewart.

Over the course of a 17-page report released Wednesday, he argued the battered stock should still be avoided, even though it has already dropped more than 70% over the past three years, and pointed to a lot of faults at Barrick: lack of growth, excess debt, poor strategic clarity, operating risk and a head office that appears to be in turmoil.

Nearly every sell-side analyst calls Toronto-based Barrick a buy or a hold. But Mr. Stewart downgraded it to underperform with a target of $11 a share, noting the company has “limited options” to repair its balance sheet and needs more time to regain investor confidence.

“Miners are known for their ability to dig holes; big miners dig big ones,” he said in the report. “Barrick, the biggest gold miner on the planet, however has dug itself into a huge financial hole that is going to be difficult to get out of any time soon unless metal prices improve.”

Of course, he noted the company’s two biggest errors of the last few years: the botched construction of the Pascua-Lama project in South America and the $7.3-billion purchase of the Lumwana mine, which is set to be shuttered because of a massive royalty hike in Zambia.

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Fool’s Gold: The limits of tying aid to mining companies – by Marco Chown Oved (Toronto Star – December 15, 2014)

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.

Barrick Gold’s massive mine in Peru has sped up community development, including schools and a hospital. So why are so many locals still jobless and poor?

QUIRUVILCA, PERU—Towering atop a pedestal in the main square, a golden statue of a miner with his headlamp and jackhammer gleams in the morning sun, a monument to the mineral wealth on which this town was built.

The Quiruvilca mine opened almost 100 years ago, and its blackened wooden structures still loom on the mountainside above the rooftops. But a century of mining copper, silver, zinc and gold brought little development to this remote settlement, nestled in a steep valley more than 4,000 metres up in the Peruvian Andes. The roads weren’t paved; many people didn’t have electricity.

Nine years ago, another mine opened, operated by Toronto-based Barrick Gold, the world’s biggest gold mining company. It has paid hundreds of millions of dollars in taxes and royalties and the new-found wealth is visible everywhere. The local government has brought power to virtually everyone in town and is now hooking up remote villages. Through an infrastructure-for-taxes program, Barrick has constructed roads, a police college, a hospital and a school. A new highway has cut travel time to the coast from eight hours to 3.5.

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Editorial: Top stories of 2014 – by John Cumming (Northern Miner – December 22, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists.  jcumming@northernminer.com

Mining and mineral exploration are by nature businesses for optimists, but looking back over 2014, it’s hard not to conclude that difficulties and disasters tended to outweigh the brighter spots of achievement and growth. Here is our choice of the top stories of 2014:

10. Peter Munk’s exit — One of the giants of Canadian mining took his final bow in the mining world in April 2014, as Barrick Gold founder and chairman Peter Munk delivered his last address to shareholders at the company’s annual meeting. Having played a pivotal role in growing Barrick from modest beginnings to the world’s No. 1 gold producer, Munk’s reputation as a company builder is secured. As the year progressed, Barrick saw a major turnover in top management.

9. Rise of the house of Lundin — While other miners focused on cutbacks, the Lundin Group of Companies was a mine developer and bargain hunter. On top of financing numerous struggling juniors, the Lundin group piled up successes such as Lundin Mining’s start-up of its Eagle mine in Michigan and purchase of the Candelaria mine from Freeport-McMoRan; Fortress Minerals’ purchase of Kinross Gold’s Fruta del Norte project; and Lucara’s continued success in diamonds.

8. Crises in West Africa — A favourite destination for junior gold miners had a deadly year marked by an outbreak of Ebola that killed 7,300 people in Sierra Leone, Liberia and Guinea.

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Tax hike, copper prices force Barrick to shutter Zambian mine – by Rachelle Younglai (Globe and Mail – December 19, 2014)

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. said it will suspend operations at its Zambian copper mine and record an impairment charge after the African country’s government more than tripled its mining royalties.

The suspension is the latest setback for Barrick, which borrowed heavily to acquire the Lumwana mine in 2011, when copper prices were soaring.

The royalty on open pit mining in Zambia will jump to 20 per cent from the current 6 per cent, under a new law that will go into effect Jan.1.

“The introduction of this royalty has left us with no choice but to initiate the process of suspending operations at Lumwana,” Barrick’s co-president Kelvin Dushnisky said in a statement.

Barrick, which employs 4,000 workers at Lumwana, said it would start cutting jobs in March after giving the Zambian government the mandatory two-months notice. The mine will be idled by the middle of the year.

It is unknown whether Barrick will be able to renegotiate rates with the government before it shutters the mine.

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NEWS RELEASE: Barrick to Suspend Operations at Lumwana Following Passage of New Mining Royalty

TORONTO, ONTARIO–(Marketwired – Dec. 18, 2014) – Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) today announced that the company will initiate procedures to suspend operations at the Lumwana copper mine in Zambia following the passage of legislation that raises the royalty rate on the country’s open pit mining operations from six percent to 20 percent.

The new taxation regime, which is expected to go into effect on January 1, 2015, eliminates corporate income tax, but imposes a 20 percent gross royalty on revenue without any consideration of profitability.

“The introduction of this royalty has left us with no choice but to initiate the process of suspending operations at Lumwana. Despite the progress we have made to reduce costs and improve efficiency at the mine, the economics of an operation such as Lumwana cannot support a 20 percent gross royalty, particularly in the current copper price environment,” said Co-President Kelvin Dushnisky .

“We sincerely regret the impact this will have on our people, as well as the communities and the businesses that depend on Lumwana, and we remain hopeful that the government will consider an alternative solution that will allow the mine to continue operating,” said Co-President Jim Gowans .

In the meantime, the company will initiate procedures to transition Lumwana to care and maintenance. Major workforce reductions are planned to commence in March, following the legally required notice period.

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