Barrick Gold Corporation – Page 53

The invisible gold rush – by Sean Phipps (The McGill Daily – November 5, 2012)

November 5, 2012

http://www.mcgilldaily.com/

Sean Phipps is a U2 Latin American Studies and Environment student. He can be reached at sean.phipps@mail.mcgill.ca.

Canadian imperialism and the gold mining boom

As I write this the price of gold is $1,776.80 an ounce, the highest it’s ever been, up from $1,023.50 in 2008 and $282.40 in 1999. Global economic instability has fueled this dramatic spike, and along with it a massive increase in gold production, an expansion that some have termed “an invisible gold rush.”

In Canada we – or at least some of us – directly benefit from this expansion. 75 per cent of the world’s mining companies (in both production and exploration) are Canadian registered, and several of the industry’s biggest players such as Barrick, Goldcorp, and Kinross are Canadian. And, with a government increasingly working to reflect the needs and interests of the extractive industry, these companies have emerged as key dictators of our country’s economic and foreign policy.

As a country, we are increasingly tied to gold. It is with this in mind that I chose to look at the long and often brutal history of gold mining, the way in which we have viewed gold over time, and to help piece together our strange relationship with this mineral.

Why gold? What has led us to value it above all other substances? Looking at a sample in the display cases in the Redpath Museum, it is hard to deny its beauty. However, gold’s real power has always been symbolic, for gold is wealth itself.

Production, labour, cost issues weigh down the world’s top gold miners – by Lawrence Williams (Mineweb.com – November 2, 2012)

November 2, 2012

http://www.mineweb.com/

With the exception of Goldcorp, third quarter results from the big five global gold miners are looking pretty dire.

LONDON (MINEWEB) – This doesn’t look like being a good quarter for the world’s top five gold miners, with only Goldcorp the exception. Both Barrick and Newmont have published figures for the quarter which will have seriously disappointed analysts, while South Africa’s two top producers have of course been suffering badly from the wave of worker dissent in their main country of production which followed on from the platinum mine strikes and the Marikana massacre.

Let’s consider the major miners individually:

Barrick Gold, the world’s largest gold miner, not only saw third quarter earnings fall by 55% compared with a year ago – but also had to report yet another increased capital cost estimate for its massive Pascua Lama project straddling the Argentinean/Chilean border. The project cost now stands at an enormous $8-$8.5 billion, effectively $1billion more than the previous figures only re-estimated a quarter earlier, and getting on for three times the original cost estimate of only three years ago.

This does not bode well for the final project capital cost – indeed the company intimated in its quarterly announcement that even these figures were not necessarily final – and the history of cost pressures suggests that any further adjustments are more likely to be up than down.

Costs rise again for Barrick’s Andes mine – by Pav Jordan (Globe and Mail – November 2, 2012)

November 2, 2012

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 Andean gold project that is key to driving future growth at Barrick Gold Corp. just got more expensive to build, and the company is still not done looking at costs.

The Toronto-based miner said the Pascua-Lama project, set in the mountains between Chile and Argentina, will now cost as much as $8.5-billion (U.S.) to develop. That’s higher than the shocking $8-billion price tag Barrick issued for the project in July, and more than double a $3-billion forecast when a construction decision was reached in 2009.

“You would expect that when they increased it by such a large amount a few months ago they would have been cautious so that they wouldn’t need to come back and disappoint us once again,” said George Topping, an analyst with Stifel Nicolaus who described the rise as “galling.”

Investors seemed to agree, driving the stock down more than 8 per cent on the Toronto Stock Exchange after Barrick announced the further cost overrun and said third-quarter profit fell by more than 50 per cent. Cash costs edged higher and the company sold less gold at lower prices. Shares of other gold miners also fell, dragged down by falling prices for the metal.

Tanzania’s president says critics misrepresent impact of development – by Michael Posner (Globe and Mail – October 11, 2012)

October 11, 2012

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.

“There is so much distortion,” complains Jakaya Kikwete. “It’s ridiculous. You see important newspapers writing nonsense.” In an exclusive interview with The Globe and Mail last week, the 62-year-old Tanzanian President – in Canada on an official state visit – says critics are misrepresenting a planned, 480-kilometre highway that will partly traverse Serengeti National Park.

Environmentalists allege the road is designed to bring oil from landlocked Uganda to Tanzanian ports and will imperil the habitats and migratory patterns of wildebeest, zebra and other wildlife. Not so, maintains Mr. Kikwete, holding court at Rideau Hall, residence of Canada’s Governor-General.

“We are building 11,000 kilometres of new roads,” he explains. “The only people left out are the people living in these remote communities. So it’s a development need, not a need to bring oil from Uganda. Second, we are not building a tarmac road through the Serengeti. [And] these people live 80 kilometres away from the Serengeti, I don’t see a risk to wildlife when you build 80 kilometres [away].”

Rebounding gold miners ‘have got religion’ – by Pav Jordan (Globe and Mail – October 4, 2012)

October 4, 2012

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

Buoyed by a new mantra of cost discipline, Canadian gold miners are starting to catch the wave of booming bullion prices after a summer of woe.

From major producers like Barrick Gold Corp., Goldcorp Inc. and Kinross Gold Corp. to junior explorers, gold mining stocks are booming, propelled by a shift in the industry to restrain spending and focus on profits and cash flow, rather than pursue reckless strategies that favoured growth at any cost.

The spot price of gold danced around $1,779 (U.S.) an ounce on Wednesday, or about seven times where it was a decade ago, when central banks were bailing out of the metal. Today, banks are piling back into gold to hedge their U.S. dollar reserves as forecasts for gold prices climb above $2,000 an ounce. And gold stock prices are beginning to catch fire.

Drastic shifts in corporate strategies are helping gold companies and their shares, repairing a disconnect between their valuations and the price of the metal. Risk-weary investors had favoured exchange-traded funds (ETFs) for exposure to gold, rather than shares of the miners themselves.

Barrick Gold closes Peruvian mine for one day after violent clashes – by Vanessa Lu (Toronto Star – September 21, 2012)

September 21, 2012

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 is resuming operations Friday at its Pierina mine in Peru after violent clashes this week between police and nearby villagers left one person dead and four injured.

In an official statement from its Peruvian unit, Barrick, which is the world’s largest gold producer, said its mine operations were suspended Thursday out of mourning for “the unfortunate event.” The dispute centres on a disruption in the local water supply, which Barrick says is out of its control, blaming drought conditions.

The open-pit mine is high in the Andes in north-central Peru at an altitude of 4,100 metres above sea level. While it was once one of Barrick’s bigger mines, Pierina produced 152,000 ounces of gold in 2011, out of a company-wide total of 7.7 million.

Mining is central to Peru’s economy. The country is a key producer of gold, copper, silver and zinc, but opposition has long existed from locals, who worry about environmental problems and possible contamination of the water supply.

Harper’s chief of staff faces scrutiny over Barrick Gold links – by Joan Bryden (Globe and Mail – August 28, 2012)

August 28, 2012

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.

Ottawa — The Canadian Press – Pointed questions are beginning to swirl around Nigel Wright, Prime Minister Stephen Harper’s chief of staff, and whether he used his position to further the financial interests of friends at Barrick Gold Corp.

Ethics commissioner Mary Dawson is following up with Mr. Wright after the disclosure that he was lobbied twice by Barrick, the world’s largest gold producer, in May.

Mr. Wright has known Barrick founder and board chairman Peter Munk for years and is particularly close to his son, Anthony, who sits on Barrick’s board of directors.

Indeed, in a 2011 magazine article, Peter Munk disclosed that Mr. Wright is godfather to Anthony Munk’s son. Mr. Wright worked with Anthony at Onex Corp., the private equity investment giant from which Mr. Wright has taken a leave of absence to work for Harper.

For Barrick, Tanzanian mines lose their lustre – by Geoffrey York (Globe and Mail – August 17, 2012)

August 17, 2012

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 — Barrick Gold Corp.’s mining operations in Africa have been a publicity nightmare for the company for years, but until now the company had always seemed confident that the mines were profitable enough to withstand the damage to its reputation.

With a steady drumbeat of violent clashes and civilian deaths in recent years, the company’s North Mara gold mine in Tanzania has been one of the most controversial Barrick mines in the world.

Protesters and activists in Canada and Tanzania have accused Barrick of turning a blind eye to human rights abuses at its African mines. Last year alone, at least five villagers were shot dead at North Mara when they invaded the site to steal waste rock.

A report by a respected Tanzanian group, the Legal and Human Rights Centre, concluded that 19 villagers were killed by police and security guards at North Mara from the beginning of 2009 to the middle of 2010. (Barrick says it disagrees with this estimate but won’t provide its own estimate.)

Barrick eyes Africa sale as problems mount – by Pav Jordan, Jacqueline Nelson, Andy Hoffman (Globe and Mail – August 17, 2012)

August 17, 2012

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, VANCOUVER — Jamie Sokalsky has made his first big move as Barrick Gold Corp.’s chief executive officer, putting the company’s high-cost Africa unit on the block as part of a larger shift in strategy.

The world’s largest gold miner is in preliminary talks to sell African Barrick Gold PLC to state-owned China National Gold Group Corp. A successful deal, which analysts expect would bring in about $2.5-billion, would give some financial relief to Barrick Gold as it struggles with billions in cost overruns at a key growth project in the southern Andes, and continues to absorb the $7.3-billion cash purchase of Equinox Minerals last year.

The negotiations, which the company said are “at an early stage,” are a signal of intent by Mr. Sokalsky, who was appointed in early June to replace Aaron Regent, who was sacked by the board. The new CEO has pledged to focus on generating higher returns from its projects, rather than simply increasing production. They also highlight China’s growing desire to be an owner of large-scale resource projects around the world, an ambition that led another state-owned corporation, CNOOC Ltd., to make a $15.1-billion bid for Calgary oil and gas producer Nexen Inc.

Barrick Gold says in talks on African Barrick stake – Reuters (Business Network News – August 16, 2012)

August 16, 2012

http://www.bnn.ca/Home.aspx

Barrick Gold (ABX-T 35.54 1.28 3.74%), the world’s largest gold miner, is in talks to sell a majority stake in its African unit to a Chinese buyer, the first move by new boss Jamie Sokalsky to clear out poorly-performing businesses and revive its flagging shares.

News of the talks with China National Gold Group, which bills itself as the country’s largest gold miner, saw African Barrick Gold shares closed down, as investors bet the buyer would pay a premium to help satisfy China’s insatiable appetite for the metal.

If it goes ahead, the sale would be one of China’s largest mining deals in Africa and its most significant incursion into large-scale gold mining on the continent to date.

Barrick is grappling with falling profit, soaring costs and the fallout from what some investors see as mistakes, including the takeover of copper miner Equinox Minerals.

Barrick ousted its previous chief executive in June, saying it was frustrated the stock had languished while bullion prices had surged. Its shares are down 30 percent over the past year, trading at levels last seen in late 2008.

Barrick in talks to sell Africa stake to China Gold – by Pav Jordan (Globe and Mail – August 16, 2012)

August 16, 2012

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. is in discussions to sell the African assets as the world’s largest gold miner struggles to rein in massive cost overruns and focus on key projects.

In a statement on Thursday, Toronto-based Barrick said it was in preliminary discussions with China National Gold Group Corporation regarding its 74 per cent holding in African Barrick Gold PLC, spun off two years ago as it removed the higher cost mines from its books.

“Discussions are at an early stage, and there can be no certainty that these discussions will result in the acquisition of all or part of Barrick’s holding in ABG,” Barrick said in a statement.

“As noted in Barrick’s 2012 Second Quarter Report, Barrick has adopted a renewed focus on maximizing shareholder value through a disciplined capital allocation program which includes optimizing Barrick’s portfolio of assets and maximizing returns on investment and free cash flow.”

Barrick is struggling to right itself as it emerges from some of the most most tumultuous quarters in its history as one of Canada’s largest companies.

Soaring costs sting Barrick – by Pav Jordan (Globe and Mail – July 27, 2012)

July 27, 2012

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. announced a massive cost overrun and one-year delay at its key Pascua-Lama gold project, as the world’s biggest gold miner struggles with soaring industry costs that are also forcing it to shelve other large projects in the pipeline.

Less than two months after it suddenly ousted chief executive officer Aaron Regent, Barrick said it is shifting its strategy to focus more on returns rather than growth in gold production. It slashed its 2015 production target to eight million ounces from nine million previously.

“In my view, rate of return should drive production, not the other way around,” said Barrick’s new chief executive, Jamie Sokalsky, pledging to take steps to reverse the company’s recent slumping stock price.

Shares of Barrick have plunged 40 per cent since September, more than its competitors, amid concerns about its aggressive move into copper and a management shake-up this year.

Barrick’s new CEO readies for public debut – by Pav Jordan (Globe and Mail – July 23, 2012)

July 24, 2012July 23, 2012

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 market will not be especially interested in the bottom line when Barrick Gold Corp. reports second quarter earnings at the end of the week.

Instead, all eyes will be on the new chief executive officer, Jamie Sokalsky, who makes his public debut at the helm of the world’s largest gold company nearly two months after his predecessor, Aaron Regent, was suddenly ousted from the role as the stock price floundered.

“I think his mandate is pretty open-ended, it’s ‘Get our stock price up,’ ” said Jorge Beristain, managing director for metals and mining research at Deutsche Bank Securities Inc in New York. “How he goes about that, he hasn’t really tipped his hand one way or another. Is he going to come out announcing a big share buyback? Is he going to come out and start shutting down some of the higher cost projects? Is he going to double-down and fast-track others?”

By far the world’s biggest gold producer, spanning the globe with stakes in 26 operating mines, Barrick has been challenged in recent years to find new ways to grow as fewer large gold deposits are discovered. Before losing his job, Mr. Regent is said to have clashed increasingly on the issue with the board and co-chairman Peter Munk, particularly after Barrick’s much-questioned acquisition of Equinox Minerals Ltd., a copper company, in 2011 for $7.3-billion in cash.

The justification for Munk’s influence at Barrick wanes – by Boyd Erman (Globe and Mail – July 17, 2012)

July 17, 2012

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. shareholders have a chance to get answers next week to some of the most pressing questions about the ouster of Aaron Regent as chief executive officer, but one key question about the future of the world’s largest gold producer will almost certainly remain.

Barrick releases earnings July 26, and senior management will address its investors for the first time in any depth since the surprise June 6 CEO change that installed Jamie Sokalsky, a long-time company man.

Investors can expect to hear what the company’s new direction is going to be under Mr. Sokalsky, the subtext being that whatever he outlines will be what the Barrick board wanted from Mr. Regent and wasn’t getting. Barrick has started by reviewing all of its projects to maximize returns.

Of course, when you say “the Barrick board,” what most people hear is “Peter Munk,” the charismatic and iconic founder of the company. Mr. Munk casts a huge shadow over the Toronto-based mining company, and wields a lot of power as Barrick’s co-chairman.

Goldcorp wins mining dispute [against Barrick Gold Corp.] – by Cristin Schmitz (The Lawyer’s Weekly – July 20, 2012)

July 16, 2012

http://www.lawyersweekly.ca/index.php?section=main

Superior Court provides guidance for rights of first refusal agreements

A major commercial law ruling from Ontario holds useful lessons for the mining industry and other sectors that incorporate rights of first refusal into joint venture or shareholder agreements, counsel say.

The case pitted two Canadian mining giants, Barrick Gold Corp. of Toronto against Vancouver-based Goldcorp Inc. (and two other defendants), in a dispute over the ownership of one of South America’s largest gold and copper deposits. Barrick contended that Goldcorp illegally gained control of the Chilean mine that Barrick had conditionally purchased from co-defendant Xstrata Copper Chile S.A.

Superior Court Justice Herman Wilton-Siegel’s 229-page ruling dismissed all of Barrick’s claims against the three defendants. “Barrick’s principal claim for breach of contract is dismissed on the basis that the agreement between Barrick Corp. and Xstrata Chile S.A. terminated upon the exercise of the right of first refusal,” the judge wrote.

Mark Gelowitz of Osler in Toronto, who represents Goldcorp, said the judgment provides a useful overview of the rationale and principles that underlie rights of first refusal (ROFRs) and similar liquidity arrangements in shareholder agreements.