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Barrick Gold Corporation

Exclusive interview: Peter Munk on ‘hubris,’ ‘stupidity’ and the future of Barrick Gold – by Rachelle Younglai (Globe and Mail – December 5, 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.

It was spring 2011, and a frenzy had gripped the mining industry.

As China consumed ever-growing amounts of copper, gold, nickel and other metals, prices were breaking records and mining companies were launching multibillion-dollar deals. The mantra in the resource sector was “growth, growth, growth.”

Barrick Gold Corp. was readying its arsenal. With gold prices flying high, the company earned a record $3.3-billion (U.S.) in 2010. The gold producer had the strongest credit rating among its peers, and everywhere Barrick chairman Peter Munk turned, brokers were offering to lend the company billions of dollars at low financing rates.

At the time, the large Lumwana copper property in Zambia owned by Toronto-listed Equinox Minerals Ltd. was a coveted prize for industry’s big base metals players. As a gold company, Barrick was not seen as a likely bidder.

But when China’s Minmetals Resources Ltd. offered $6.3-billion (Canadian) to acquire Equinox, the situation proved too tempting for Mr. Munk.

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Barrick’s Munk sets timeline for departure, shakeup – by RAchelle Younglai (Globe and Mail – December 3, 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.

Barrick Gold Corp. founder and chairman Peter Munk will step down at the company’s next annual meeting and hand over the reins to the miner’s co-chairman John Thornton, people familiar with the matter said on Monday.

The company, which Mr. Munk built into the world’s largest gold producer, is expected to formally announce Mr. Munk’s retirement and changes to Barrick’s board after directors meet Wednesday.

In November, Barrick signalled in a regulatory filing that Mr. Munk would retire by the next annual meeting and said it would provide a corporate governance update, including decisions on the board and Barrick’s executive compensation arrangements.

The announcement came after Barrick’s institutional investors, including the Ontario Teachers’ Pension Plan, said there were not enough independent directors on Barrick’s board and voted overwhelmingly against Mr. Thornton’s $11.9-million signing bonus.

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Barrick’s Thornton Said to Seek China Deal to Rebuild Min – by Liezel Hill & Matthew Campbell (Bloomberg News – December 2, 2013)

http://www.bloomberg.com/

Peter Munk built Barrick Gold Corp. (ABX) into the world’s largest gold producer by expanding into Africa and South America. Now former Goldman Sachs Group Inc. President John Thornton is betting on China to help revive the beleaguered company’s fortunes.

At a Dec. 4 board meeting, Thornton will be confirmed as Barrick’s next chairman, succeeding Munk, 86, who plans to retire at the Toronto-based company’s next annual shareholders meeting after three decades, according to people familiar with the situation.

Thornton, 59, currently co-chairman, already helps to oversee long-term corporate strategy. As part of that remit, he’s trying to establish partnerships with Chinese companies that may include investment in Barrick and future mining projects, said the people, who asked not to be identified discussing a private matter. China Investment Corp., the country’s largest sovereign wealth fund, is among potential partners Barrick has met with, the people said.

The leadership change at Barrick comes at the end of a difficult year for the company. It has lost 41 percent of its market value in 2013 while debt levels have soared after a slump in gold prices, rising operating expenses and a cost blowout at an $8.5 billion mining project in the Andes.

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Barrick’s Peter Munk: Stubborn, proud and leaving on his own terms – by Peter Koven (National Post – November 8, 2013)

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

Five years ago, the Financial Post asked Peter Munk when he planned to retire from Barrick Gold Corp. His response: “When they kick me out.” But that wasn’t really true.

Mr. Munk is as stubborn and proud a businessman as there is. And despite the numerous calls for him to step aside in recent years, he was always going to leave on his own terms.

On Friday, Mr. Munk’s 86th birthday, Barrick disclosed that he plans to retire. No timeline was provided, though sources said the departure will most likely come at next year’s annual meeting, when the company plans to introduce new directors in a long-awaited overhaul of its board.

Investors have gotten increasingly fed up with the board in recent years, as it has made some awful strategic errors and approved some outlandish pay packages for company insiders. Mr. Munk, the founder and chief authority at Barrick for 30 years, was the key figure behind every move and the natural lightning rod for investor dissent.

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Peter Munk’s extraordinary career of booms and busts – by Rachelle Younglai and Brent Jang (Globe and Mail – November 9, 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.

TORONTO and VANCOUVER — Peter Munk, a refugee from Hungary who built Canadian businesses in real estate, oil and electronics, is getting ready to bid farewell to the company he transformed into the world’s largest gold producer.

The fedora-sporting tycoon, who turned 86 on Friday, is about to leave Barrick Gold Corp. The industry behemoth he started with a small stake in a Northern Ontario mine is now struggling to regain investor confidence following two years of declines in prices for the precious metal.

Booms and busts have defined Mr. Munk’s life. He was born into a wealthy banking family in Budapest, but the Nazi occupation of his homeland during the Second World War forced them to flee. The Munks used most of the family fortune, held in cash and gold, to board a train in 1944 to Switzerland. About four years later, Mr. Munk left England for Toronto, where he lived with his aunt and uncle.

In Toronto, he helped found sound electronics maker Clairtone Sound Corp., whose high-fidelity products were promoted by the likes of Hugh Hefner and Frank Sinatra.

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Peter Munk to step down as Barrick chairman – by Boyd Erman, Tim Kiladze and Rachelle Younglai (Globe and Mail – November 9, 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.

Barrick Gold Corp. publicly announced the pending retirement of chairman Peter Munk on Friday, after a week in which bankers faced a tepid response to the company’s $3-billion (U.S.) share sale.

Barrick said Friday that it expected to update investors before year-end on various initiatives to renew its board, following discussions this year between directors and institutional shareholders regarding compensation practices and governance. The initiatives include “succession in the chairman role at the company, consistent with Mr. Munk’s desire to retire as chairman,” Barrick said.

The message that Mr. Munk would announce his retirement by year-end had been quietly conveyed by some bankers working on Barrick’s big share sale over the past week, according to sources familiar with the situation. Some investors had indicated they wanted more clarity on the board revamp before agreeing to buy any stock.

One asset manager, speaking on condition of anonymity, said he was told by a banker advising Barrick on Monday that an announcement on Mr. Munk’s future would come by year-end.

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Barrick’s controversial deal raises the pressure on Peter Munk – by Boyd Erman (Globe and Mine – November 4, 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 pressure on Barrick Gold Corp. founder Peter Munk is becoming so intense that he may soon have to do what he has so far resisted – announce a timetable for his own departure from the company he built into the world’s largest gold producer.

Major Barrick shareholders are boycotting a huge $3-billion (U.S.) stock offering, demanding that the company speed up the pace of change on its board. The focal point of that board has always been one man, the charming tycoon who created Barrick.

Mr. Munk, who turns 86 on Friday, is a Canadian business legend, and rightly so for what he has built. Yet he has also become the symbol of a company that has beaten up shareholders through badly timed acquisitions, cost overruns at mines, writedowns and stock sales that dilute their ownership. The latest financing is earmarked to pay down a $15-billion debt load – much of it taken on for the disastrous purchase of Equinox Minerals Ltd. – and will increase Barrick’s share count by about 16 per cent.

Amid all that, Barrick’s board has done little to dispel the notion that Mr. Munk makes all the big decisions.

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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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