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Barrick Gold Corporation

At the barricades with Barrick Gold – by Terence Corcoran (National Post – April 23, 2013)

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

With all the problems Barrick Gold is facing, the giant government-created Canadian pension institutions have zeroed in on a mostly trivial obsession: executive compensation

On Wednesday, Peter Munk’s Barrick Gold will stage its annual meeting while under fire on all fronts. The price of gold has crashed, major projects are coming in way over budget, third-world governments are giving the company a hard time, Barrick’s stock price is at its lowest in decades, investors have lost billions in market value.

Third quarter results will also be released Wednesday. In the face of all this turmoil, what do the Giants of Self-Important Canadian Pension Institutions do? Move in with an attack on the most trivial issue of all: executive compensation.

In a news release last Friday, seven of Canada’s government-based institutional pension investors and a pension-management firm from the U.K. announced that they would be voting against Barrick’s say-on-pay resolution and against the three directors who are members of the company’s compensation committee.

For the record, the seven Canadian funds are: Alberta Investment Management Corp., B.C. Investment Management Corp., Caisse de depot et placement du Quebec, Canada Pension Plan Investment Board, Ontario Municipal Employees Retirement System, Ontario Teachers’ Pension Plan and the Public Sector Pension Investment Board.

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Investors look for Barrick’s ‘Plan B’ as gold prices tank – by Pav Jordan (Globe and Mail – April 22, 2013)

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.

Peter Munk could not have anticipated what lay before his company when he publicly berated the management team at Barrick Gold Corp.’s annual meeting last May for failing to boost the company’s share price, despite six years of record profits.

Fast-forward a year and shareholders might have their own harsh words at this year’s meeting on Wednesday for Mr. Munk and for Barrick, the Toronto-based company he built into the world’s largest gold miner.

The past 12 months have been some of the hardest in Barrick’s 30-year history. The company has changed CEOs, shuffled its board and been hit with project delays and multibillion-dollar cost overruns and writedowns. It’s also facing some anger by institutional shareholders over its decision to pay an $11.9-million (U.S.) signing bonus to co-chairman John Thornton, a former Goldman Sachs executive.

Just as the company looked to be getting its finances under control, it has been whacked by a tectonic shift in the gold price, which last week dropped as low as $1,361 an ounce from highs of $1,900 in 2011.

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Barrick rebellion: With gold miner’s stock in the dumps, investors push back – by Peter Koven (National Post – April 20, 2013)

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

This has been the worst month in Barrick Gold Corp.’s modern history. It is about to get worse. On Wednesday, the Toronto-based gold miner will be greeted by some very frustrated shareholders at its annual meeting. The company does not usually face hostility from investors at its AGMs, but this year appears to be different.

Virtually everything has gone wrong for Barrick lately. And as gold began a steep descent last week and the company’s key project was partially halted, the stock price plunged 33% in six days. It is an gut-wrenching freefall for a company of Barrick’s size and it takes the stock to its lowest levels since 1993 when gold averaged just US$360 an ounce.

Remarkably, an even bigger source of investor ire emerged on Friday. Seven of Canada’s largest pension funds announced that they are opposing the US$11.9-million “signing bonus” that Barrick paid to co-chairman John Thornton last year, and plan to vote against the entire compensation committee. Mr. Thornton received a whopping US$17-million in 2012, and he was not the only beneficiary of Barrick’s largesse. Chairman Peter Munk (US$4.3-million), chief executive Jamie Sokalsky (US$11.4-million) and “ambassador” Brian Mulroney ($2.5-million) all received big pay hikes despite a bad year for the stock price.

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Huge Barrick mine in Chile faces long delay as obstacles pile up – by Alexandra Ulmer (Reuters U.S. – April 16, 2013)

http://www.reuters.com/

SANTIAGO, April 15 (Reuters) – Barrick Gold Corp faces some tough legal obstacles to complete its up to $8.5 billion Pascua-Lama gold mine after a recent court decision, and even the possibility that its Chilean environmental permit might
be canceled.

In the latest of several recent blows to the country’s mining and power industries, a Chilean court last week suspended
construction of the mine, which straddles the border of Chile and Argentina, while it weighs claims by indigenous communities that the mine destroys pristine glaciers and harms their water supply.

The ruling is one of several challenges facing Pascua-Lama, which was originally touted as one of the world’s largest and
lowest-cost gold mines. Experts say there is a risk that the unpopular project faces months, or even years, of legal limbo, damaging Chile’s investor-friendly reputation.

Moreover, politicians are unlikely to intervene during an election year on behalf of the project, a hot potato in Chile. “Pascua-Lama’s legal path looks difficult,” said Luis Cordero, law professor at the Universidad de Chile. “If the company isn’t able to adequately negotiate a plan to meet (demands), its permit could be revoked.”

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Barrick’s Pascua-Lama mine setback signals larger shift in Chile – by Pav Jordan (Globe and Mail – April 12, 2013)

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.

A ruling from a Chilean court to halt work on the world’s most ambitious gold project marks a growing backlash against the industry in one of the world’s most mining-friendly areas.

The Pascua-Lama gold and silver project straddles the Andes mountain range between Chile and Argentina and is slated to go into production this time next year, if project owner Barrick Gold Corp. can convince an appeals court in the northern town of Copiapo – population 167,000 – that it isn’t polluting the water supplies of indigenous communities.

The ruling represents a rare injunction against a mine that has been more than a decade in the making, having cleared regulatory hurdles including environmental permitting in Chile and Argentina. It’s also the latest instance of a Chilean court hearing a complaint against a project already cleared by environmental authorities.

Chile has long been viewed as a miner’s Utopia, complete with some of the richest mineral reserves on the planet as well as one of its most mining-friendly, stable governments, but some say it has become so saturated with projects that its infrastructure is straining at the seams and communities are becoming alarmed. The shift comes amid a growing wave of resource nationalism, which has touched most of the world’s mining jurisdictions.

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Barrick’s woes in Chile deepen as Pascua Lama is suspended – by Pav Jordan (Globe and Mail – April 11, 2013)

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 suspended construction in Chile on its massive Pascua-Lama gold and silver project, responding to a court order that further delays work on a mine already a year behind schedule and billions of dollars over budget.

Barrick stock fell 8.6 per cent to a new 52-week low of $24.81 per share on Wednesday after the appeals court said Pascua-Lama should be halted amid allegations the project is polluting precious groundwater and rivers in the Atacama desert region, one of the driest areas on earth.

The allegations have not been proven in court, but they mark the latest roadblock to a project that has been more than a decade in the making, enduring intense environmental scrutiny that has reverberated from Santiago to Toronto.

The complaints are also another instance of communities demanding more control over their environment amid building resource nationalism.

Less than a year ago, Barrick raised the development price tag on Pascua-Lama to more than $8-billion, compared to estimates of around $3-billion when the company launched the project in 2009. A significant portion of higher costs were attributed to a year-long delay in building the mine.

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Who’s next? Munk focuses on Barrick’s big question – by Pav Jordan (Globe and Mail – March 27, 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.

Peter Munk, the iconic chairman of Barrick Gold Corp., is looking for a successor to the one person who has been a constant during the company’s tumultuous 30-year history: himself.

In a message to shareholders in the company’s annual report for 2012, Mr. Munk said he has been working with directors to find someone with the drive, ambition, global experience and contacts to lead the board, and strongly hinted that his co-chairman, former Goldman Sachs Group Inc. executive John L. Thornton, might be that man.

“A vital prerequisite for the future is a new generation of qualified and developed leadership,” Mr. Munk said in the letter. He did not provide a timeline for succession but lauded the achievements of Mr. Thornton. His appointment as co-chairman last year was part of a larger corporate shakeup that also saw the instalment of a new CEO, Jamie Sokalsky.

“It is indeed our great fortune that John has reached a point in his spectacular career at the same time when our need for someone of his exceptional qualifications, credentials and experience also reached a decision point,” Mr. Munk said.

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Detained Barrick Gold shipment [Dominican Republic] seen as shot across the bow- by Pav Jordan (Globe and Mail – March 20, 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. managed to get its shipment of gold out of the Dominican Republic this week, but that may not spell the end of travails in the Caribbean country that is demanding a greater share of profits from its newest gold mine.

In the latest incarnation of resource nationalism in the hemisphere, Barrick is being asked by the government to renegotiate how it shares profits from the $3.7-billion Pueblo Viejo gold mine with the impoverished state.

Barrick argues that its current contract is legally binding, and will see 50 per cent of net cash flow – or some $11-billion – go to the government over the 25-year life of the mine, jointly owned by fellow-Canadian miner Goldcorp Inc.

“They are going to have to come up with some sort of compromise that will allow Barrick to continue to operate the mine profitably and allow the government to really save face on this, because the government has put a lot of political capital into what they’ve said they are going to do,” said John Gravelle, Canadian mining leader for consultancy PricewaterhouseCoopers.

Dominican President Danilo Medina said in speech to the nation in February that the current deal with Barrick was “unacceptable” and threatened to impose a windfall tax on profits if no deal is reached.

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Barrick gold shipment detained by Dominican Republic – by Reuters (Globe and Mail – March 14, 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., the world’s largest gold miner, said on Thursday that a shipment of gold from its Pueblo Viejo mine in the Dominican Republic had been detained by customs officials in the Caribbean nation.

The delay comes just weeks after Dominican President Danilo Medina demanded that the company renegotiate its operating contract for the rich gold mine and threatened to clamp a windfall tax on profits if the contract was not modified.

Toronto-based Barrick said in a statement it was investigating the cause of the delay and seeking confirmation that the shipment can resume. It gave no further details. Fernando Fernandez, director of customs in the Dominican Republic, said the shipment was halted because of a problem with documentation.

“When it is resolved, the shipment will go out,” he told reporters. Pueblo Viejo, one of world’s largest new gold projects, is jointly owned by Barrick and Canada’s second largest gold miner, Goldcorp Inc.

On Feb. 27, in a speech marking the 169th anniversary of the Dominican Republic’s independence, Mr. Medina said the terms of the contract with the two Canadian miners were unacceptable and demanded more benefits from the mine.

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In conversation with Barrick CEO Jamie Sokalsky – (Beyond Borders – January 29, 2013)

Click Here For: Barrick Gold Beyond Borders

After serving as Barrick’s Chief Financial Officer for more than 13 years, Jamie Sokalsky was appointed President and CEO in June 2012. He quickly set the company on a new course that stresses disciplined capital allocation. At the same time, he has indicated Barrick remains steadfast in its commitment to corporate social responsibility (CSR) and sharing the benefits of mining with host communities. In a wide-ranging interview, Sokalsky talked about his new role and CSR at Barrick.

How are you enjoying your new role as CEO?

Very much. I’m proud to be the CEO of a company that’s an icon in Canada and a world leader in its industry. I’ve been with this company a long time and I know what great assets, people, and opportunities we have. Our goal is to set the bar in terms of responsible mining, where we consistently hit our financial targets while operating in a way that provides benefits to the communities where we operate. It’s exciting, and we have a great future head of us.

You have been with Barrick since its early days. In your view, is it the same company today?

I think the fundamental values of the company are very similar, even though we have grown and evolved and are a much more global company today. The ethics of the company — and the desire for people to conduct themselves with honesty and integrity — have always been there. I’d say the desire to do things the right way has been in Barrick’s DNA since the founding of the company by Peter Munk. Those fundamental core values remain the same.

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Barrick’s Golden Sunlight mine pursues clean-up of historic mines (Beyond Borders – January 2013)

Click Here For: Barrick Gold Beyond Borders

RESPONSIBLE MINING AT BARRICK GOLD CORPORATION

Barrick’s Golden Sunlight mine is spearheading an ambitious project to clean up environmental contamination at historic mine sites in Montana that will save the state and federal taxpayers millions of dollars.

Montana’s long history of mining, much of which pre-dates modern mining and environmental regulation, left a collection of improperly closed tailings impoundments and waste-rock piles that require clean-up. With taxpayers on the hook for the costs, Barrick found a creative solution.

In particular, while Montana’s historic tailings impoundments and waste-rock piles contain metals that can harm the environment, they also contain gold that can be extracted profitably at today’s prices. Barrick’s Golden Sunlight mine offered to re-process and store this material in its modern facilities, obviating the need for taxpayer-funded clean-ups.

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A rush and a reckoning: Why writedowns are plaguing mining companies – by Pav Jordan, Tim Kiladze, Sean Silcoff (Globe and Mail – February 16, 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.

Speaking at a mining conference in Florida nearly two years ago, David Garofalo said the words nobody wanted to hear, and most simply chose not to say.

In the midst of a wave of mergers and takeovers, the chief executive officer of HudBay Minerals Inc. fired a warning shot for the whole industry. Taking the microphone in front of his peers, he reminded them that growth for growth’s sake was “very value destructive.” And he took aim at the popular notion that commodity prices were in a “supercycle,” less vulnerable to slowing economic growth.

“We are not in a supercycle. This is a cycle and when the central banks find religion on inflation again, the cycle will be over,” the 23-year industry veteran told peers, including top brass at the world’s largest mining firms.

Mr. Garofalo may as well have been the prophet of doom, his words heralding the start of a downturn in the global mining sector that has seen a litany of multibillion-dollar losses at top companies.

In the ensuing fallout, chief executives have been fired and project financing has dried up. Acquisitions that were hailed as game-changers are now derided as dumb mistakes. A once-robust pipeline of new projects is all of a sudden looking emaciated, one mining company after another puts its ambitious growth plans on hold.

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Barrick Gold Bets Once More on Nevada After Zambian Flop – by Liezel Hill (Bloomberg.com – February 15, 2013)

http://www.bloomberg.com/

Barrick Gold Corp. is betting growth will come from Nevada, where the world’s largest producer scored its first big success three decades ago, after more than $9 billion in writedowns and cost overruns in the past two years on projects from the Andes to Zambia.

Chief Executive Officer Jamie Sokalsky said yesterday the Toronto-based company doubled the estimated resources at the Goldrush deposit in Nevada last year, even as it sells assets and cuts spending elsewhere to revive shares that slumped 24 percent. Barrick is also pushing ahead with Pascua-Lama, a gold and silver mine on the Chile-Argentina border it expects to open next year.

“The priorities for the company, once we finish Pascua- Lama, really are focused on Nevada,” Sokalsky said yesterday on the company’s earnings call. “We have one of the most exciting exploration finds in recent memory, the Goldrush discovery, to ultimately add to this Nevada production in the future.”

Sokalsky’s mantra yesterday was steady and safe. The CEO, who took the job June 6, said the company has no plans to build more new mines and is looking to sell lower-return assets including its energy unit and the 50 percent it owns in a nickel project in Tanzania.

Shareholders reacted positively to Sokalsky’s moves to do “anything that will increase shareholder value” yesterday, lifting the stock 2.3 percent in Toronto.

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Barrick’s overpriced Equinox acquisition comes back to bite in US$4.2B writedown – by Peter Koven (National Post – February 15, 2013)

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

TORONTO – Like many of its mining peers, Barrick Gold Corp. has received its comeuppance for a badly overpriced acquisition.

The world’s biggest gold miner took a humiliating US$4.2-billion writedown on Thursday, mostly tied to its struggling Lumwana copper mine in Zambia. The move acknowledged what investors already knew: Barrick paid far too much when it agreed to buy Equinox Minerals Ltd. (Lumwana’s former owner) for $7.3-billion in 2011.

“The operating results at Lumwana have been disappointing since we acquired Equinox,” chief executive Jamie Sokalsky told investors. “They’ve been unacceptable, actually.”

Barrick’s move is the latest in a string of massive asset writedowns that have scarred the mining industry in the past year. It comes one day after Kinross Gold Corp. announced a US$3.1-billion charge on the Tasiast mine, another asset that was acquired for too much money.

The Barrick impairment is typical of the ones seen across the industry. The company made a huge acquisition at the top of an overheated market. When costs rose more than expected and metal prices cooled off, the carrying value of the asset on its balance sheet had to be reduced. Last month, Rio Tinto Ltd. and Cliffs Natural Resources Inc. took writedowns under similar circumstances.

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Despite writedown, Barrick digs in on Zambia copper play – by Pav Jordan (Globe and Mail – February 15, 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. says it can still make its African copper business pay off, despite a multibillion-dollar writedown on Zambian mines hit by skyrocketing costs.

Toronto-based Barrick said on Thursday it took a $3.8-billion charge on its copper business in the fourth quarter, marking the second Canadian miner to be shaken this week by bets made two years ago, when commodity prices were soaring.

The charge stoked some of the worst fears of investors who have long fretted that buying the assets in 2011 under the $7.3-billion acquisition of Equinox Minerals Ltd. was a mistake.

“Obviously I’m disappointed that we’ve had to take this impairment, and it’s a sizable impairment, in hindsight, in terms of what we paid for it,” Barrick chief executive officer Jaime Sokalsky said in an interview Thursday with The Globe and Mail.

“But it is a big asset in a world-class copper belt and ultimately, if we can get the costs under control and ultimately get a higher copper price down the road – which I think has a good likelihood of happening – this asset could be very very valuable for us.”

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