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Barrick Gold Corporation

Barrick investors cool to stock sale, push for board revamp – Boyd Erman and Rachelle Younglai (Globe and Mail – November 2, 2013)

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.

Pressure is mounting on Barrick Gold Corp. to speed up changes in its boardroom, with some large investors demanding the company improve its governance before subscribing to the $3-billion (U.S) stock offering the gold miner launched to pay down its debt.

The banks underwriting the deal pushed hard to sell the 163.5 million shares on Friday, the day after the transaction was announced.

But by late in the day, the stock was not fully sold. Barrick shares closed at $18.02 on the New York Stock Exchange, 1.8 per cent below the offering price of $18.35.

The offering faces a number of hurdles. It is one of the largest stock sales in Canadian history, and Barrick’s share price has been in a long decline. On top of that, the price of gold fell Thursday and Friday.

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Barrick Gold Corp to raise more than US$3-billion in share sale, shelve Pascua-Lama mine – by Peter Koven (National Post – November 1, 2013)

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

Barrick Gold Corp. has launched a monster US$3-billion equity offering in an effort to repair its debt-laden balance sheet. The move was announced late Thursday afternoon, just hours after the Toronto-based miner said it is suspending construction of the troubled Pascua-Lama project.

“Both actions will radically improve Barrick’s balance sheet, which had become the major overhang to its outlook,” Deutsche Bank analyst Jorge Beristain wrote in a note.

Barrick shares were down more than 6% at US$18.15 in early trading Friday. It is the third largest bought deal in Canadian history, according to Financial Post data, and follows months of speculation that Barrick would tackle its debt load. The company is carrying US$15.4-billion of debt, much of it tied to the disastrous $7.3-billion takeover of Equinox Minerals Ltd. in 2011.

As gold prices declined this year, servicing that debt became more of a burden and pushed Barrick into action. The company plans to use at least US$2.6-billion of the proceeds from the offering to repay debt.

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Troubled Barrick launches $3 billion stock sale – by Lisa WRight (Toronto Star – November 1, 2013)

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.

The world’s largest gold mining company has decided to suspend construction of a mine that straddles the border between Chile and Argentina.

Barrick Gold Corp. announced one of Canada’s largest stock sales Thursday right after it shelved indefinitely its prized Pascua-Lama gold and silver project on the border of Chile and Argentina in a double-whammy to its already withering share price.

The TSX halted trading on the world’s largest gold company at 4:15 p.m. after Barrick announced it seeks to raise $3 billion in cash to reduce debt and strengthen a damaged balance sheet that has been under fire lately by increasingly disgruntled shareholders.

Shares of the cash-strapped Toronto miner – which has seen its share price cut in half over the last year — had fallen another 6 per cent earlier in the day as investors learned construction is now suspended on of one of the richest, untapped gold deposits in the world.

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Barrick to Suspend Work on Pascua-Lama to Conserve Cash – by Liezel Hill (Bloomberg News – October 31, 2013)

http://www.bloomberg.com/

Barrick Gold Corp. (ABX) will temporarily suspend construction at its $8.5 billion Pascua-Lama mine on the Argentina-Chile border as the world’s largest producer of the metal tries to conserve cash after prices slumped.

Work on the project, located more than 12,000 feet (3,657 meters) up in the Andes mountains, was already partially halted amid a water dispute. All activity except that needed for environmental protection and regulatory compliance will cease, Barrick said today in a statement. It said a restart depends on future costs, gold prices and the regulatory and legal outlook.

Barrick has come under pressure after gold prices fell 21 percent this year and its debt increased. The Toronto-based company, led by Chief Executive Officer Jamie Sokalsky, has explored cash-raising options ranging from a strategic equity investment to a sale of a stake in its copper business, people with knowledge of the matter said yesterday.

The company also has considered the sale of an equity stake or an interest in Pascua-Lama to state-backed Chinese investors, the people said. Barrick has struggled with the mine, its sole mine-construction project, amid ballooning costs, delays and environmental challenges.

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Barrick Gold may raise Pascua-Lama costs once more – by Allison Martell (Reuters Canada – October 29, 2013)

http://ca.reuters.com/

TORONTO (Reuters) – Barrick Gold Corp (ABX.TO: Quote) will likely raise the cost estimate for its huge Pascua-Lama mine project in South America for the third time in less than two years when the world’s top gold producer reports results on Thursday.

Much has changed since November, when Toronto-based Barrick pegged the cost of the gold and silver project at $8.5 billion, and markets are anxious to see the company’s new capital cost estimate.

High in the Andes, on the border between Chile and Argentina, Pascua-Lama is Barrick’s biggest and most important growth project. It’s risky, but the potential is great: when and if the mine is completed, it is expected to have exceptionally low operating costs, which could pay dividends for years to come.

Since Barrick released its November estimate, regulators have halted construction on the Chilean side of the project, citing serious environmental violations. Barrick has agreed to build a new water management system to meet their concerns, and said in June it would defer some spending that had been scheduled for 2013 and 2014.

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Northerners climb to top of corporate ladders – by Carl Clutchey (Thunder Bay Chronicle-Journal – October 28, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Two multinational mining companies playing a significant role in Northwestern Ontario’s economy are being directed by former Northerners. Cliffs Natural Resources announced Friday that Sudbury native Gary Halverson is to become the company’s next president and CEO.

Halverson, 55, whose 30-year international career includes hands-on management of two gold mines in Timmins, is to assume his new position with Cliffs on Nov. 18. The CEO of Barrick Gold, which operates the renowned Hemlo deposit near Marathon, is Thunder Bay native and Lakehead University commerce graduate Jamie Sokalsky.

Halverson earned an MBA degree at Athabasca University, near Edmonton, after obtaining a metallurgy engineering degree from Michigan Technological University, on the south shore of Lake Superior.

Cleveland-based Cliffs is in the process of doing pre-development work on a proposed chromite mine in the heart of the Ring of Fire mining belt 500 kilometre northeast of Thunder Bay.

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Tanzania: Barrick Gold – Compensation to Villagers Brings Joy -by Mugini Jacob (All Africa.com – October 18, 2013)

http://allafrica.com/

IT has been all smiles with the locals in the neighbourhood of North Mara Gold Mine since last week after word went around that African Barrick Gold(ABG) has released compensation amounting to 8.12 bn/-.

The villagers have been anxiously waiting for the compensation after a special task force formed by the government completed evaluation on the areas needed by the mine to expand its operations.

Paulo Ludovick is one of those who will share the spoils after accepting to sell part of his land to the ABG, the leading Tanzanian gold producer with several gold mines located in the lake zone region.

“People will pocket 8bn/-. It has never happened in a single episode, and it is just a small piece of land”, Mr Ludovick told the’ Daily News’ About 382 men and women are on the list of the ABG’s latest compensation initiative to communities living near Nyamongo area in Tarime District of Mara Region.

The compensation has been dubbed phases 33 and 26. Compensation of many phases have been done in the past and payment of other several phases are being prepared, according to a credible report from the Tarime District Council made available to the ‘Daily News’ this week.

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Barrick is the best buy: Dundee’s Goodman (Business Network News Interview – October 16, 2013)

http://www.bnn.ca/

Click here for the Ned Goodman interview: http://www.bnn.ca/News/2013/10/16/Dundees-Goodman-Barrick-is-the-best-buy.aspx

Long-time mining financier Ned Goodman says a controversial $11.9-million signing bonus paid to Barrick Gold (ABX-T 19.16 0.93 5.1%) co-chairman John L. Thornton was fair.

Goodman, who is president and CEO of Dundee Corporation (DC.A-T 19.81 -0.04 -0.2%), told BNN that Thornton is “an unbelievably capable guy,” and is worth the money.

“He got paid what he deserves,” Goodman said. Back in April, leaders of several investment groups signed a letter criticizing Thornton’s compensation, including the CEOs of Ontario Teachers’ Pension Plan, Caisse de Depot et Placement du Quebec and OMERS, the Ontario Municipal Employees Retirement System.

“This amount for a signing bonus for a co-Chairman of the Board is, to our knowledge, unprecedented in Canada and is in addition to other compensation for the year for a total package of $17 million in 2012,” the letter said.

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Preventing and managing social conflict in Peru (Beyond Borders – July 2, 2013)

Beyond Borders is published by Barrick Gold Corporation: http://barrickbeyondborders.com/

Peru has one of the world’s fastest-growing economies, driven largely by its mineral wealth and the expansion of the mining industry. Today, most major global mining companies have operations in the country, including Barrick, BHP-Billiton, Newmont, Freeport McMoran, Glencore Xstrata and others.

Increased mining sector investment and revenues have provided significant benefits to Peru’s national economy. The sector’s contribution to total government revenue averaged 14 percent between 2000 and 2010. In 2010 alone, Peru mined $18 billion worth of minerals, accounting for 12 percent of the country’s gross domestic product. The mining boom has contributed to a marked reduction in Peru’s poverty rate to about 28 percent in 2011 from 42 percent five years earlier, according to The World Bank.

Barrick has been operating in Peru for the past 15 years and has two mines in northern Peru — Pierina and Lagunas Norte. The contribution of these operations to economic prosperity is significant. In 2012, Barrick paid nearly $400 million in taxes and royalties in Peru, and purchased approximately $340 million in goods and services in the country. Ninety-nine percent of the 1,200 Barrick employees who work at Pierina and Lagunas Norte are Peruvian nationals.

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In Chile’s dry north, big mining threatens a vital resource – by Rosalind Adams and Sarah Tory (Santiago Times – August 24, 2013) [Part 1 of 3]

http://www.santiagotimes.cl/ [Chile]

Part I of a three-part series on Chile’s water crisis: Amid a growing water shortage, the Huasco Valley struggles to find a balance between mining and agriculture.

Deep in Chile’s Atacama Region, Sandra Anacona makes jam from the apricots and peaches that grow on her two-acre farm, land that has been in her husband’s family for six generations. Her face wrinkled into a permanent smile, she shuffles around the kitchen preparing meals and piping-hot cups of Nescafé for the endless parade of neighbors and family who show up at her dining table.

In the Valle del Huasco, these family-run farms, clustered around small pueblos like Alto del Carmen and San Félix, are permanent fixtures: ask for directions, and people give names instead of addresses — testament to a lifestyle that has changed little in 200 years.

Formed by the river snaking between Andean peaks, the Valle del Huasco appears like a ribbon of green in one of the driest places on Earth. Defying the surrounding desert, acres of pisco grapes grow, along with mangos, oranges, papayas and avocados.

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Barrick Gold founder Peter Munk’s final play – by by Jonathon Gatehouse (MacLean’s Magazine – October 1, 2013)

http://www2.macleans.ca/

He’s fending off a shareholder revolt and fighting for a legacy

Back in 1996, Peter Munk sat down with one of his biographers and laid out his 34 “golden rules” for success in business. Some of them offer practical advice: “Always leave something on the table in a public issue. If you push for the last penny, it may hurt you the next time around.” While others border on fortune-cookie wisdom: “Time is short.

If you want to achieve much, you’ve got to run.” Taken all together, the list seems less like a coherent corporate philosophy than an odd mélange of exhortations to take risks and calls for fiscal prudence. But there was also an element of prophecy—at least when it comes to the current fortunes of the celebrated 85-year-old entrepreneur. “If you want to dream big, expect big problems,” states rule 30. “Big dreams challenge the fates.”

From its humble beginnings as an oil and gas play in 1983, Munk’s Toronto-headquartered Barrick Gold Corporation has grown into the world’s largest gold producer, with 24 mines operating on four continents, five more in development and ore reserves estimated at more than 140 million ounces. Characterized by the relentless pace and sheer scale of its acquisitions, including a 2011 foray into copper with the $7.66-billion takeover of Equinox Minerals Ltd., the company had been a darling of investors for more than two decades. At its peak in 2011, Barrick was trading at $53 a share and had a market capitalization of $54 billion.

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Peter Munk responds to his critics – by Peter Munk (Globe and Mail – September 25, 2013)

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.

In an article published in this newspaper on Sept. 18, 2013, David Parkinson was unfairly critical of me and the governance practices at Barrick Gold Corp. Mr. Parkinson went so far as to suggest that I was treating Barrick as if it were my “personal piggy bank.” You have extended to me the opportunity to rebut his criticisms, for which I am thankful.

I founded Barrick more than 30 years ago. In the period since, Barrick has become one of the most successful companies in Canada, and one of the world’s largest and most profitable gold mining companies. Barrick now has operations on five continents and more than 25,000 employees. In the most recent fiscal year, Barrick had record revenues of more than $14.5-billion. In the last three years alone, despite some major non-cash write-offs, Barrick had operating cash flows of more than $16-billion; and EBITDA (earnings before interest, taxes, depreciation and amortization) of more than $23-billion. Measured by these key metrics, this ranks Barrick as one of the top performing companies on the Toronto Stock Exchange over the period.

Contrary to Mr. Parkinson’s assertions, the board of directors of Barrick takes its governance obligations very seriously. Moreover, the compensation arrangements referred to in his article were approved both by Barrick’s compensation committee, comprised entirely of independent directors; and subsequently and unanimously by the independent directors of the board as a whole.

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Barrick Gold’s brave (and scary) new world – by David Milstead (Globe and Mail – September 21, 2013)

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.

The buzzword at Barrick Gold Corp. is governance, as the miner responds to unhappy shareholders by adding new members to its board and revising its pay practices for key executives.

The changes that may make the biggest difference to its survival, however, are occurring at the Toronto-based company’s mines. During the past few months, Barrick has cut its head count and deferred capital spending. It has also slashed its dividend as the price of gold has slumped.

As the most debt-heavy miner in the industry, Barrick has the most to lose as gold prices decline. It also has the most to gain as gold prices rise, which may explain why the shares are now near $20, up about 40 per cent from their weakest points earlier this year, as gold has bounced off its recent lows.

Investors who choose Barrick as a means of playing a gold rebound, however, could be in for a long, painful slog if the metal’s price languishes.

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Pressure on Barrick Board Centers on Long-Time Directors – by Liezel Hill & Katia Dmitrieva (Bloomberg News – September 18, 2013)

http://www.bloomberg.com/

Investor pressure to change the board at Barrick Gold Corp. (ABX), the world’s biggest producer of the metal, is centering on long-serving directors, including former Canadian Prime Minister Brian Mulroney.

Canada’s biggest pension funds want new independent board members and say the miner should consider replacing directors who have been there longer than 20 years and are close to Co-chairman and founder Peter Munk, according to two investors briefed on the matter who asked not to be identified because the information hasn’t been made public.

Barrick said yesterday it will add new independent directors and strengthen its executive pay policies after investors criticized governance at the company. The gold miner took $8.7 billion of writedowns in the second quarter and cut its dividend 75 percent after gold prices fell the most in three decades.

“The tenure on the board is far too long and there are far too many non-independent directors,” said Robert Gill, a Toronto-based fund manager at Aston Hill Financial Inc. (AHF), which manages C$7.8 billion ($7.6 billion), including Barrick shares. “It’s time to change the board and we need to bring in more independence into the board,” he said by phone Sept. 11.

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Investors turn up the heat on Barrick for boardroom change – by Jacqueline Nelson (Globe and Mail – September 17, 2013)

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.

Some investors are seeking reform in Barrick Gold Corp.’s boardroom and want the company to hasten the transfer of power from co-chairman Peter Munk, according to a published report.

In the most recent sign of tensions at the world’s largest gold miner, about 10 shareholders based in Europe will soon send the board of directors a letter to push for faster changes, the Wall Street Journal said, citing sources close to the company.

“Some directors have sought change at a faster pace than others have been comfortable with,” the report said. The Journal said director Robert Franklin planned to give up his board seat if some new directors weren’t appointed.

Earlier this year, a group of seven major pension funds took issue with the beleaguered gold producer’s board after a large sum was paid to Mr. Munk’s co-chairman, John Thornton.

More than 85 per cent of the company’s stakeholders did not approve of the $17-million payout to Mr. Thornton, voting against it and other multimillion-dollar payments to board members, including Mr. Munk.

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