Barrick Gold Corp. (
TSX: T.ABX,
Stock Forum) Chairman Peter Munk is set to retire from the Toronto-based gold mining company, according to regulatory documents filed in the United States.
Once dubbed the "Man with the Midas touch," the Barrick founder is getting on in years -- he was born in Hungary in 1927 -- and continues to wield too much power over the company's board, according to some critics.
In documents filed with the U.S. Securities & Exchange Commission, the company made the following statement:
“Since the company’s 2013 annual meeting, various directors of Barrick have engaged in discussions with Barrick’s institutional shareholders to understand their perspectives on Barrick’s compensation practises and governance arrangements.
The Board is addressing the issues that have been raised with our directors, which include modification of the company’s executive compensation arrangements, the rejuvenation of the board through a combination of departures from the Board, the addition of independent directors and succession in the Chairman role at the company, consistent with Mr. Munk’s desire to retire as Chairman of the Board of Directors, as previously indicated.
The company’s intention is to update the market before year end on these initiatives, with governance changes expected to take effect in conjunction with Barrick’s next annual meeting.”
The statement is contained in documents filed in connections with a $3 billion bought deal offering aimed at reducing debt.
It suggests that Munk intends to step down at the company's next annual shareholders meeting.
Barrick is the world’s leading gold producer. The company is under pressure to cut costs and recently announced the suspension of construction of its $8 billion Pascua-Lama project, which straddles the border separating Argentina and Chile.
In a recent research report, Canaccord Genuity said the suspension of construction at Pascua-Lama will be “an overhang,” especially because production economics have been called into question as re-start of construction is dependent on “go-forward costs, outlook for metal prices, and reduced certainty with legal and regulatory environments.”
As a result of the delay at Pascua, Barrick expects a capex reduction in 2014 of $1 billion. A Bay Street analyst noted that the halt is unlikely to get lifted until the permitting situation is resolved, which is currently expected in late 2014 when the environmental remediation is completed, Canaccord said in its newsletter.
The delay may be at least 18 to 24 months, and will likely result in higher capex given current plus 25% annual cost inflation in Argentina which
Goldcorp Inc. (
TSX: T.G,
Stock Forum) recently reported at its Cerro Negro project.
Meanwhile, Barrick shares fell 1% to $18.79 in late morning trading Friday, leaving the mining giant with a market cap of $18.8 billion, based on over one billion shares outstanding. The 52-week range is $37.95 and $14.22.