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Gold and Silver

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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Red Lake amps up electricity fight – by Ian Ross (Northern Ontario Business – July 2012)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Out of power?

There’s a “looming electrical power crisis” in Red Lake, one of the world’s gold mining capitals, and its economic development officer is looking to garner regional support to push for transmission line upgrades.
 
Bill Greenway wants to kick off a lobbying campaign directed at the Ontario Power Authority (OPA) to build a beefed-up transmission line to service a slate of new mine developments.
 
Since 1930, the Red Lake district has been a consistent producer of high- grade gold. But while much of the province’s power planning attention is directed at the Ring of Fire in the Far North, Greenway feels his town’s concerns have been placed on the backburner.
 
“I’d like to think we have a Ring of Gold,” said Greenway. He maintains the current 115 kV (kilovolt) high voltage serving Red Lake is inadequate to meet the municipality’s and industry’s future growth needs.

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Sceptics await 11 million ounce Barkerville Gold approved NI43-101 resource statement – by Lawrence Williams (Mineweb.com – July 11, 2012)

www.mineweb.com

Barkerville Gold surprised the markets with the announcement of very large preliminary indicated gold resource assessments last week, but sceptics are awaiting official confirmation before climbing in.

LONDON (Mineweb) –  One of the surprise stories last week was the announcement by Canada’s Barkerville Gold of an enormous indicated mineral resource assessment on its principal properties in central British Columbia’s Cariboo Mining District which the company said it had to release early once the latest geological assessment was made known to the Board under Canadian stock market regulations. 

 Normally a company would wait for the full NI43-101 report to be approved by the relevant authorities and published, but the preliminary information received from the independent consultants assessing the resource represented such a huge ‘material change in conditions’ that the directors were obliged to report to shareholders as soon as they were made aware.
 
Indeed, the figures presented to the Board by the independent consultants, Geoex, assessed by well-known Canadian geologist Peter George, went a lot further than this estimated 10.63 million ounce indicated resource on the company’s Cow Mountain (also known as Gold Quartz) section. They suggested a geological potential for a massive 65-90 million ounces of gold on the 6.4 km long Island-Cow-Barkerville trend covering three adjacent mountains, all with a prior underground gold mining history.  Barkerville has been assessing mining these with large scale open pits.

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Barkerville in spotlight over gold find – by Peter Koven (National Post – July 7, 2012)

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

Did Barkerville Gold Mines Ltd. make one of the greatest Canadian gold discoveries in decades? If so, investors aren’t buying it just yet. Until last week, Vancouver-based Barkerville was a little-followed junior mining company on the TSX Venture Exchange, one of hundreds. It is now in the spotlight because of a massive gold resource it reported at its Cow Mountain project in central British Columbia.

Barkerville said drilling at Cow Mountain has uncovered a staggering 10.6 million ounces of indicated gold resources. The company’s press release also stated the “geological potential” of Cow Mountain could be as high as 90 million ounces.

To put it in perspective, the legendary Timmins gold camp has produced about 70 million ounces. Less than 100 million ounces are produced globally each year. It is unusual for a company to use geological potential figures at the top of a press release like that (particularly with such monstrous numbers), and it troubled some experts.

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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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B.C. Fraser River’s mining history still shaping waterway’s future – by Randy Boswell (Victoria Times Colonist – June 23, 2012)

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

British Columbia residents facing a flood emergency this weekend can partly blame 19th-century gold miners for their woes.
 
Two Canadian scientists have shown how the Fraser River — the waterway at the heart of British Columbia’s history, and currently the focus of a flood threat in Abbotsford and elsewhere in B.C.’s Lower Mainland — was significantly altered by 19th-century fortune seekers, whose dumped mine tailings from the Fraser’s gold-rich banks and tributaries accumulated at critical points along the southern course of the river and continue inching toward its Pacific outlet today.
 
The study of the ongoing “geomorphic impact” of 1800s-era placer mining in the Fraser watershed, co-authored by UBC researchers Andrew Nelson and Michael Church and published in the latest Geological Society of America (GSA) Bulletin, argues that present-day flood and fishery management for the 1,375-kilometre river — B.C.’s longest — need to account better for the “legacy effects” of the Gold Rush and carefully distinguish between the pre-1858, “natural” state of the Fraser’s riverbed and its post-Rush condition.
 
Millions of tonnes of gravel flushed into the Fraser by miners as early as 154 years ago have been “accumulating in the river in the Lower Mainland throughout the 20th century,” Church told Postmedia News.

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Timmins working to attract New Brunswick mine workers to the city – by TEDC News Release/The Timmins Times (June 22, 2012)

http://www.timminstimes.com/

Timmins Economic Development Corporation (TEDC) travels to Bathurst, NB where mine is closing next year

Timmins is heading to the east coast of Canada to see if it can find more skilled mine workers to come to the City With a Heart of Gold.

Cheryl St-Amour, from the Timmins Economic Development Corporation (TEDC), has travelled to Bathurst New Brunswick with representatives of Xstrata Copper Kidd Operations to promote the City of Timmins, and specifically, www.jobsintimmins.com said a news release from TEDC. Cheryl St-Amour noted that the “jobsintimmins” website has now become a central source of information on available employment opportunities in the City of Timmins, said the release.

Bathurst is home to the Brunswick Mine, an Xstrata Zinc operation. In March 2012, the company announced that Brunswick Mine would close in 2013 after almost half a century of mining activity. More than 800 people will be seeking to use their skills at other projects. These employees consist of a variety of skilled and unskilled workers, equipment operators, professionals and other mining related positions, said TEDC.

Xstrata Zinc is working to assist employees and their families transition to new opportunities and have been holding both internal and external job fairs for employees.

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Ontario: The Golden Province – Global Business Reports Ontario Profile (May 2012)

Global Business Reports is an international provider of industry specific reports to the global trade and investment community. This article is from a profile about Ontario mining for Engineering & Mining Journal.

Editorial researched and written by Ramona Tarta, Karim El Badrawy, Angela Harmantas, and Amanda Lapadat of Global Business Reports.

Ontario is Canada’s leading gold-producing province, comprising 53% of the country’s output

With low-grade gold deposits now feasible, many in the mining community have looked to Ontario’s established mining camps as guaranteed moneymakers throughout this opportunistic period. Red Lake, Kirkland Lake, and Timmins are undergoing  revitalization and, in addition, mining companies have ventured off into less traditional territory, exploring for gold and creating new mining frontiers.

A Rich History

Ontario’s modern mining industry can be traced back to the summer of 1903 in what is presently the small town of Cobalt. Ironically, the mining industry in Northern Ontario, a region known for its gold camps, was spurred on by the discovery of the precious metal’s often underappreciated “little brother,” silver. By most accounts, the discovery of silver at Cobalt was a fluke; a railroad worker from the Temiskaming and Northern Ontario Railway serendipitously located a huge silver vein while expressing his annoyance with a local fox.

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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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Marathon takes action in the mining economy – by Ian Ross (Northern Ontario Business – June 2012)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Prepping for the boom

The Town of Marathon is preparing to meet the needs of the mining industry with two new operations expected to come online within the next three years. Barrick Gold, 40 kilometres west of Marathon, is in the feasibility stage of expanding its open pit at the Hemlo complex to extend mine life by 10 years.
 
And just north of the town of 3,300, Stillwater Mining is now in the environmental assessment and permitting stage of its Marathon PGM deposit, expected to be ready for open pit operations by 2015.
 
Daryl Skworchinski, Marathon’s community services and economic development manager, has carried out a value-chain assessment to determine what does a mining economy look like, and how can Marathon fill the gaps on the supply side.
 
“Barrick was really helpful in letting us know where their purchasing comes from and now we’re finalizing our action plan to hit the road and do some active recruiting at the (mining) shows.”

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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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Barrick fires chief Regent; CFO appointed to top job – BNN.ca staff (Business Network News – June 6, 2012)

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

Aaron Regent is out as chief executive of Barrick Gold, and CFO Jamie Sokalsky has been appointed to the top job. The company cites its disappointing share performance as the main reason for the change, while sources tell BNN the move was a result of conflicting strategies on the miner’s future direction.
 
“We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance. Our Board has every confidence in Jamie’s experience and commitment to take our company forward,” said Peter Munk, Barrick founder and chairman, in a statement.
 
But, a source close to the company tells BNN’s Howard Green that the real issue was corporate strategy. “This wasn’t around performance of the company, this was around the direction of the company,” the source, who asked not to be identified, said.

Recent moves — such as dividend hikes — to improve share performance have failed to significantly boost the share price.

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