Barrick Gold Corporation – Page 48

Hedge fund urges breakup of Barrick Gold to boost stock price – CBC News Business (September 9, 2013)

September 9, 2013

http://www.cbc.ca/news/business/

A small, U.S. hedge fund wants to break up Canadian mining giant Barrick Gold, saying its collection of mining assets is spread out over too broad of a geographic area, which has led to a disappointing shareholder return.

Mike Morris, co-founder of Two Fish Management, which is exposed to Barrick Gold through its options holdings, has written to Barrick CEO Jamie Sokalsky and other board members recommending that the North and South American assets of the mining company be split from the African and Australian Pacific holdings.

“Each distinct business unit has unique political environments, geologies, operating costs, reserve profiles, profitability, capital intensities and growth prospects,” he says in the letter.

Barrick Gold’s stock has fallen by nearly 50 per cent in the past year, as the gold mining company took massive writedowns and cut its dividend. The price of gold has been falling, but in addition, Barrick’s gold production per share fell 28 per cent from 2003 to 2012, Morris said.

U.S. hedge fund demands breakup of Barrick, additions to its board – by Canadian Press (Vancouver Sun – September 5, 2013)

September 5, 2013

http://www.vancouversun.com/index.html

A U.S. hedge fund is making a renewed call for changes at Barrick Gold, calling for the breakup of the company and the addition of a mining engineer and geologist to its board.

Mike Morris, principal and founder of Two Fish Management, said Wednesday that there is no compelling reason for Barrick to own a worldwide conglomerate of gold mines. “The market is essentially assigning a massive conglomerate discount to the company,” he said Wednesday.

Since Two Fish first wrote to Barrick demanding changes in April, the gold miner has agreed to sell off its Barrick Energy subsidiary in a series of deals worth a total of $455 million and three high-cost mines in Western Australia to South Africa-based miner Gold Fields Ltd. for $300 million.

But Morris and Two Fish wants more and to that end, the fund has produced a new 78-page presentation detailing the changes it thinks are needed. “This is Canada’s company and this is the world’s largest gold-mining concern and it doesn’t have a geologist or an engineer on its board,” he said.

Fears grow about Reko Diq Gold mines…Baloch senator says deal offered to China; government denies – by Shaheen Sehbai ([Pakistan] The News International – August 28, 2013)

August 29, 2013

http://www.thenews.com.pk/

WASHINGTON: While major world mining and investment companies are preparing to invest big time, big money in Balochistan, specially in the mining sector, suspicions and doubts that the biggest gold mine of Reko Diq may be quietly handed over to China as part of the growing economic ties are also coming to the fore.

Official and business circles have been wondering for some time what will happen to the multi-hundred billion dollar Reko Diq gold and copper mines after the world’s largest mining company, Barrick Gold of Canada, was thrown out of Pakistan by the Supreme Court of Pakistan during the PPP regime.

But after the recent visit of high level government delegation to China and a flurry of quick MoUs and super-paced exchange of visits, an important leader from Balochistan, former Senator Sana Baloch has alleged publicly that the government has promised these mines to China in a year or so.

While the Government leaders strongly denied any deal or any promise made during the Beijing visit, an official Pakistan Government statement assuring that the Reko Diq mines will be given to the highest bidder in an international tender is still awaited.

Barrick Gold Corp. to sell three mines in Australia for $300 million (Canadian Press/Toronto Star – August 23, 2013)

August 23, 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.

Barrick Gold Corp. has agreed to sell off three high-cost mines in Western Australia to South Africa-based miner Gold Fields Ltd. — a move analysts say will free Barrick up to focus on more profitable operations.

Barrick said it will receive about $300 million from the sale, which is subject to customary closing conditions, including approval by Australia’s Foreign Investment Review Board.

The company said the three mines that comprise the Yilgarn South assets produced a total of 452,000 ounces of gold in 2012 and a further 196,000 ounces in the first half of this year.

Kerry Smith, an analyst at Haywood Securities, said selling the higher-cost mines will reduce Barrick’s operating expenses and have only a minimal impact on the company’s production volumes. “By eliminating those three mines out of their portfolio, it frees their management up to spend more time on other assets that actually make more cash,” Smith said.

Barrick Gold sells mines to Gold Fields as part of restructuring – by James Wilson and Andrew England (Financial Times – August 22, 2013)

August 22, 2013

http://www.ft.com/home/us

London/Johannesburg – Barrick Gold has started its promised restructuring by selling a trio of Australian gold mines to industry rival Gold Fields.

The $300m sale will help the Canadian miner’s stretched balance sheet and will switch Gold Fields’ main production focus away from western Africa to Australia, where it will bundle assets with its existing mines to try to lower costs.

Barrick, the world’s largest gold miner by volume, flagged the possible sale of the Yilgarn South mines earlier this month, when it posted an $8.6bn quarterly loss. The loss was linked to writedowns to asset values because of the fall in the price of gold this year.

The three mines at Yilgarn South produce 452,000 ounces of gold annually, equivalent to about a quarter of Gold Fields’ annual output. Barrick said the sale would not change its plan to produce between 7m and 7.4m ounces this year.

Nick Holland, Gold Fields’ chief executive, said there was “considerable opportunity for cost synergies” between the Lawlers mine, one of the Yilgarn South group, and its adjacent Agnew mine.

RPT-INSIGHT-Barrick Gold’s Peter Munk seeks to regain his Midas touch – by Euan Rocha (Reuters U.S. – August 22, 2013)

August 22, 2013

http://www.reuters.com/

Aug 21 (Reuters) – Peter Munk has long driven the agenda for Barrick Gold Corp, the company he formed in 1983 and built into the world’s largest gold producer, but recent missteps have raised questions about the leadership of a man once seen as a visionary in the industry.

Munk, who owns a stake of less than a quarter of a percent in the company, still steers Barrick’s strategy from his position as chairman, and he is now attempting to shore up the miner’s position. But some investors, seizing on what they view as misguided decisions and problems at several mines, are questioning both the company’s direction, and Munk’s role.

In the last two years, gold miners across the globe have been stung by falling bullion prices and a surge in costs. Barrick has fared worse than its rivals, outlining about $13 billion in writedowns this year alone.

Its share price is down nearly 65 percent in two years, outpacing a 50 percent drop in the NYSE Arca Gold Bugs Index , and a 26 percent drop in the price of spot gold.

While environmental woes at its Pascua-Lama gold-mining project, high in the Andes, have been the biggest drag on Barrick’s share price, investors have taken the most issue with its disappointing push into copper and with a proposal to give Munk’s heir apparent, co-chairman John Thornton, an unusually large, $11.9 million signing bonus.

Another gold CEO bites the dust – this time at African Barrick – by Lawrence Williams (Mineweb.com – August 21, 2013)

August 21, 2013

http://www.mineweb.com/

African Barrick Gold’s CEO Greg Hawkins has resigned and has been replaced by Bradley Gordon, formerly with Intrepid Mines, to try and improve the fortunes of the African gold miner.

LONDON (MINEWEB) – African Barrick Gold (ABG), which has seldom seemed able to meet its operating objectives since its spin-off from parent Barrick Gold and listing on the London Stock Exchange three years ago, has announced the resignation of its Chief Executive Officer, Greg Hawkins ‘to pursue other opportunities’, and his replacement by Australian Bradley Gordon who takes over with immediate effect. Gordon resigned from his previous position as CEO of Intrepid Mines last month – presumably with the ABG appointment already settled.

Thus, Hawkins is the latest gold mining company CEO to be ousted, in this case to see if new blood can revitalise the ailing African gold miner. African Barrick stock has lost 73% of its value since its launch in 2010 and, although part of this fall is attributable to the plunging gold price and so outside management control, Hawkins is seemingly carrying the can for the company’s continual underperformance.

ABG operates three mines in Tanzania and is that country’s largest gold miner. The flagship mine is the Bulyanhulu underground operation and the others are Buzwagi (open pit) and North Mara, also an open pit operation. A fourth mine, Tulawaka, was closed down earlier this year as it was uneconomic.

Gold producers squeezed by rising costs and sliding prices – by Tim Kiladze (Globe and Mail – August 12, 2013)

August 12, 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.

Midway through his master’s degree in geology in the 1980s, Brian Christie trekked to the Red Lake gold mine in Northwestern Ontario as part of a research project. About 930 metres deep, more than one and a half times the CN Tower’s height, the remote mining project was a treat for a geology student eager to make his mark in the industry.

At the time, Red Lake was near the top of the list of the world’s most important gold mines in terms of grade and volume. Even today, after decades of production, some areas of the mine produce 57 grams of the gold per tonne – many multiples ahead of the industry average.

Yet the enthusiasm for projects such as that once drew Mr. Christie to research Red Lake has been undercut by a 10-month slide in gold prices and at least $23-billion worth of writedowns by Canadian gold miners over the past year and a half.

Today, Red Lake’s high-grade gold is found as far down as 2,350 metres, about four times the CN Tower’s height, which shows the difficulty gold miners face in trying to boost their stock valuations even if prices for the precious metal rebound.

The ‘new world order’ of mining isn’t pretty – by John Shmuel (National Post – August 3, 2013)

August 3, 2013

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

If there was a stock market discount bin, it would be overflowing right now with mining stocks of all shapes and market caps.

The TSX materials sector is down more than 30% so far this year, with gold miners being particularly clobbered, having lost 38% of their value since January. It’s been the worst year for global mining stocks since the financial crisis.

The last bastion of safety for mining investors — potash stocks — collapsed this week to join their digging and drilling brethren in the basement. The break-up of a Belarusian-Russian cartel that was responsible for 43% of global potash exports is to blame. Its demise led to a potash price collapse, resulting in a sharp pullback for fertilizer stocks such as Potash Corp. of Saskatchewan Inc., Mosaic Co. and Agrium Inc.

The bad news didn’t stop there. A day later, Barrick Gold Corp. revealed the second-worst loss in Canadian corporate history. The miner announced it lost US$8.56-billion in the second quarter, after a massive US$9.3-billion writedown at its Pascua-Lama development in Chile.

All of that ensures Canadian mining stocks are well on their way to posting a third-straight annual decline. It’s no wonder many fund managers, despite seeing a lot of value in the sector, are proceeding cautiously.

Tanzania: Kabanga Nickel Project – Light At the End of Long Tunnel – by Meddy Mulisa (All Africa.com – August 2, 2013)

August 2, 2013

http://allafrica.com/

Bukoba — THE much-awaited Kabanga Nickel Project will soon start its operations, bringing fresh hopes to many in terms of labour and employment, according to President Jakaya Kikwete during his recent tour of Kagera Region.

Kabanga Nickel is an active mine exploration project 130 kms south west of Lake Victoria in Ngara District, Kagera Region. The project is a joint venture between Barrick Gold and Xstrata Nickel.

The Minister for Energy and Minerals, Prof Sospeter Muhongo said the government would buy shares which would later be sold to wananchi. He also appealed to Tanzanians to grab the opportunity for their wellbeing. He said a total of 80 megawatts would be produced at Rusumo Falls to generate power at Kabanga Nickel.

“This is a joint project between three countries -Tanzania, Burundi and Rwanda with each country taking 27 megawatts. Kabanga’s 58 million tonne nickel resource is regarded as one of the best undeveloped greenfield nickel sulphide deposits in the world. Since 2005, there has been continued progress made in the development of the Kabanga Nickel Project with a significant investment to date of over US$205 million in drilling and evaluation studies.

Barrick looks to cut high-cost mines – by Tim Kiladze (Globe and Mail – August 2, 2013)

August 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.

After its second major writedown in just six months, Barrick Gold Corp. is trying to wooing back shaken investors by focusing on assets closer to home.

The world’s largest gold miner announced a hefty $8.7-billion (U.S.) after-tax impairment charge, leaving the company with a second-quarter loss of $8.6-billion.

Barrick also slashed its dividend by 75 per cent as part of its second quarter earnings. In response to the losses, the Toronto-based company plans to shed, suspend or shut high-cost mines and continue to cut costs.

Chief executive officer Jamie Sokalsky said he is considering changes to his lineup of high-cost mines, most of which are in Africa and Australia. On a conference call Thursday, he said is already “well-advanced in a process to sell certain Australian assets.”

The miner will also continue to slash expenses where possible, having already cut or deferred $4-billion in capital spending over the past year, half of which came in the first six months of 2013.

Gold miners Barrick, Kinross report huge losses as prices fall (CBC News Sudbury – August 1, 2013)

August 2, 2013

http://www.cbc.ca/sudbury/

Barrick Gold will slash its quarterly dividend to 5¢ US per share

Barrick Gold Corp. and Kinross Gold Corp. have both taken billions of dollars of writedowns and taken an axe to their dividends as they struggle with lower metals prices that have savaged their bottom lines.

On Thursday, Barrick Gold reported an $8.56-billion US loss and slashed its quarterly dividend by 75 per cent to five cents a share as bullion and copper prices languish far below their previous highs.

It also signalled plans to cut jobs and lower capital spending. Barrick recognized an $8.7-billion impairment in the second quarter, mainly due to lower metal prices. The gold mining giant has also run into major delays in its efforts to build a big mine in South America.

“Over the past year, we have taken and are continuing to take a series of steps to reduce costs as part of our disciplined capital allocation framework, which allowed us to respond quickly to the new metal price environment,” said Jamie Sokalsky, Barrick’s president and CEO.

UPDATE 2-African Barrick eyes more cost cuts as impairment hits H1 – by Clara Ferreira-Marques and Sarah Young (Reuters India – July 30, 2013)

August 1, 2013

http://in.reuters.com/

LONDON, July 30 (Reuters) – Miner African Barrick Gold , battling a plunge in the price of bullion, identified more cost cuts to help engineer a turnaround after sinking to a first-half loss on the back of a $727 million impairment charge.

African Barrick was under pressure even before a gold price rout began in April, hit by illegal mining, power generation problems and strikes, issues which forced it to warn in February that output would shrink for a fifth straight year.

The company on Tuesday posted a first half net loss of $701.2 million, against a profit for the year-ago period of $73.7 million, after a lower gold price and a review of its lower grade mines forced it to take the $727 million charge.

On a quarterly-basis, however, it beat consensus on a production and cost basis, helped by actions taken as part of a review.

The review identified $185 million of potential savings, with over $100 million of cuts seen in 2013. Initially prompted by a failed takeover attempt earlier this year, the process was given fresh impetus by a fall in the price of gold.

Barrick Goes Worst to First on Bets Gold Bottomed: Canada Credit – by Ari Altstedter (Bloomberg News – July 29, 2013)

July 30, 2013

http://www.businessweek.com/

Barrick Gold Corp. (ABX), the largest miner of the metal, has gone from the worst performer to the best among Canadian firms with U.S. dollar bonds, on bets gold prices have bottomed out after the biggest drop in 90 years.

Barrick bonds returned an average 3.2 percent this month, the most among the 50 largest issuers tracked by the Bank of America Merrill Lynch U.S. Corporate & Yankees Canadian Issuers Index. Barrick’s 5.25 percent notes due in April 2042 rose 5.1 percent in July, the biggest advance in the index. Last month the company’s debt was the biggest loser among the largest issuers on the index with a 10 percent decline, the data show.

Gold miners, including Goldcorp Inc. (G), the world’s biggest by market value, have announced at least $15 billion of writedowns in the past two months after the precious metal’s steepest quarterly drop in London trading in more than nine decades. The metal’s price has risen from almost a three-year low at the end of June, when Barrick announced it may write down as much as $5.5 billion.

“I think there’s a good chance we bottomed out,” said Scott MacDonald, who helps manage $600 million as head of research at MC Asset Management Holdings LLC in Stamford Connecticut. “You had a bubble in prices. You burst the bubble. Prices became more reasonable, and investors now feel the water is OK to go back in.”

Exclusive: Chile indigenous group likely to appeal Barrick ruling -lawyer – by Alexandra Ulmer (Reuters India – July 19, 2013)

July 19, 2013

http://in.reuters.com/

SANTIAGO – (Reuters) – A Chilean indigenous group will likely ask the Supreme Court to review a lower court decision on Barrick Gold Corp’s Pascua-Lama gold mine, because the ruling does not go far enough to protect the environment, a lawyer representing the group told Reuters on Thursday.

The appeal will probably also seek a re-evaluation of the suspended $8.5 billion project and ask that Barrick present a new environmental impact assessment study, a potentially lengthy and costly process, the lawyer, Lorenzo Soto, added.

The Copiapo Court of Appeals on Monday ordered a freeze on construction of the project, which straddles the Chile-Argentine border high in the Andes, until the company builds infrastructure to prevent water pollution.

“It’s very likely we appeal the decision,” Soto said. “What we’re interested in is that the project be re-evaluated. What is optimal, in our opinion, is for the project to present a new environmental impact assessment.”

Soto said the decision on whether to appeal would be made on Friday. The Diaguita indigenous group has until Monday to file with the court, he added.