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Barrick Gold Corporation

Barrick Gold closes Peruvian mine for one day after violent clashes – by Vanessa Lu (Toronto Star – 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.

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Harper’s chief of staff faces scrutiny over Barrick Gold links – by Joan Bryden (Globe and Mail – 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.

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

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

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Barrick Gold says in talks on African Barrick stake – Reuters (Business Network News – 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.

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Barrick in talks to sell Africa stake to China Gold – by Pav Jordan (Globe and Mail – 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.

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Soaring costs sting Barrick – by Pav Jordan (Globe and Mail – 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.

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Barrick’s new CEO readies for public debut – by Pav Jordan (Globe and Mail – July 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.

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The justification for Munk’s influence at Barrick wanes – by Boyd Erman (Globe and Mail – 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.

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

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The crash, the trapper and a plane load of missing gold – by Josh Wingrove (Globe and Mail – July 6, 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.

EDMONTON — The flight began uneventfully, with the hulking DC-4 propeller plane, loaded down with gold, rising up from a remote airstrip near a northern B.C. mine.

It was headed to nearby Alaska where its 16,600 pounds of gold concentrate would be processed. It’s a coarse, grainy substance of varying quality – nothing like solid gold, but nonetheless valuable.

At 460 metres (1,500 feet) above sea level, things went wrong. The No. 2 engine whined, cut out and fell off the left wing altogether. The plane banked right to return to the airstrip, but the other three engines couldn’t support the weight, sending it crashing onto a sandbar along the raging Iskut River, not far from the mine, on Aug. 14, 1996. The pilot’s body was never recovered, while the two other crew members made it to shore.

So began a mystery of a doomed B.C. plane and its load of gold, a tale emerging again after the plane reappeared – empty. Barrick Gold, which had since bought up the smaller outfit that owned the now-closed mine, rushed to the remote crash site and, this week, reported that the plane had already been stripped clean. The company does not know where the gold is.

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Argentine ruling won’t stop project, Barrick says – by Pav Jordan (Globe and Mail – July 6, 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.

A law banning mining around glaciers in Argentina will not derail development of one of the world’s largest new gold projects, Barrick Gold Corp. said. The Pascua-Lama project is on track to go into production in 2013 after years of fighting over its environmental impact.

Argentina’s Congress passed the law – which also bans drilling on oil rigs – about two years ago in an effort to protect water reserves, but opponents held it off with an injunction that was overthrown by the Supreme Court on Tuesday, driving Barrick Gold stock lower amid concerns Pascua-Lama may be halted.

“The impact of the law on Barrick is nil,” said Barrick spokesman Andy Lloyd, pointing out that there are no glaciers near the mine on the Argentine side of the cross-border project with Chile, where 70 per cent of the mine is being built.

Barrick stock stumbled on news of the ruling earlier this week because it raised alarm bells that Pascua-Lama might be thwarted by the same environmental concerns it already faced down nearly a decade ago, when a media storm echoed from Andean capitals in Buenos Aires and Santiago to Barrick headquarters in Toronto.

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Most productive CEO? Fired Barrick exec generated most profit for pay among peers – by Bloomberg (Toronto Star – June 15, 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.

Aaron Regent, who was fired last week as chief executive officer of Barrick Gold Corp. after failing to boost the stock price, generated more profit for every dollar of pay last year than any of his peers in Canada and the U.S.
 
Barrick, the world’s largest gold miner, earned $514.98 for every dollar the Toronto-based company paid Regent for 2011, according to data compiled by Bloomberg. That was more than the CEOs of the six other largest North American gold companies. Goldcorp Inc., the second-largest producer by market value, reported $172.09 of net income for every dollar awarded CEO Chuck Jeannes. Yamana Gold Inc. CEO Peter Marrone brought in $47.88 in profit for every dollar of pay.
 
Executive compensation is coming under increasing scrutiny, with gold mining CEOs among the best-paid in Canada last year, even as their companies’ shares failed to match gains in gold prices.
 
“I would like to see the compensation more directly tied to the stock prices,” Pawel Rajszel, a Toronto-based analyst at Veritas Investment Research, said in an interview. “Then you’ll see these producers be more disciplined in terms of capital allocation.”

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Was Regent the heavy or the fall-guy for Barrick’s missteps? – by Dorothy Kosich (Mineweb.com – June 7, 2012)

www.mineweb.com

As a new co-chairman shares Chairman Peter Munk’s workload, employees and shareholders may finally have to concede that Barrick Gold’s patriarch can’t manage the world’s top gold miner forever.

RENO (MINEWEB) – While Barrick’s ouster of CEO Aaron Regent Wednesday grabbed the lion’s share of the news headlines, the decision of 84-year-old Peter Munk, the co-founder and chairman of Barrick, to appoint a co-chairman may actually have the longer-term ramifications for the world’s top gold miner.
 
Over the years, Munk has been a stickler for share price performance. And, perhaps, a warning of what was on the cards for Regent occurred last month when Munk told shareholders at the Barrick’s annual meeting that the company’s share price was not satisfactory.
 
In 2003, Munk ousted then-CEO Randall Oliphant as a Barrick news release said, “The board made the change to address its concerns over the company’s recent performance…”
 
In a news release publicizing Regent’s ouster, Munk once again stressed, “We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance.”

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Barrick shakeup highlights risk fears – by Pav Jordan, Eric Reguly, Jacquie McNish (Globe and Mail – June 7, 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, Rome — The dismissal of Barrick Gold Corp’s chief executive officer over the company’s long-stagnant stock price signals deepening concerns that a year-old, multibillion dollar bet on an African copper project has turned sour.

Toronto-based Barrick, the world’s biggest gold miner, said on Wednesday it ousted president and CEO Aaron Regent less than four years into the job, a period during which the company’s shares barely moved on the Toronto Stock Exchange despite a huge rally in the price of gold.

“We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance,” said Peter Munk, who founded Barrick and remains the driving force of the company.

Barrick made a bold move into the copper market last year with its $7.3 billion acquisition of Equinox Minerals Ltd., but the deal alienated many investors who saw it as an expensive departure from the company’s focus on gold. Barrick shares dropped sharply on news of the deal.

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