Barrick shakes up board, new chairman muses on hedging

Wed Dec 4, 2013 7:08pm EST
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By Allison Martell and Euan Rocha

(Reuters) - Barrick Gold Corp (ABX.TO: Quote), under fire for missteps in a tough market, started to address investor demands for a more independent board on Wednesday, by replacing two directors close to its departing founder with a pair of mining industry experts.

Incoming chairman John Thornton said he may look at hedging Barrick's exposure to the price of gold and made it clear that over the long term, the world's biggest gold producer, could diversify further into other metals.

As widely expected, Barrick confirmed that Thornton will replace 86-year-old chairman and founder Peter Munk this spring. Two other directors will also leave, and Barrick nominated four new independent directors.

"Slowly, Barrick has been ticking off the boxes as it tries to turn this big supertanker around," said Barrick shareholder John Ing, president of Maison Placements Canada. "They have been very successful as far as addressing a lot of the problems. This is quite positive."

Barrick's shares have fared worse than many of its hard-hit peers, and are languishing near 21-year lows, weighed down by cost overruns at its now mothballed Pascua-Lama gold silver project in the Andes and its pricey takeover of Africa-focused copper miner Equinox in 2011.

The Toronto-based company has been under shareholder pressure to add more mining expertise to its board, and overhaul its executive pay system.

Its four new board nominees are: veteran Canadian money manager Ned Goodman, property development executive Nancy Lockhart, former university president David Naylor and Ernie Thrasher, founder of closely held U.S. metallurgical coal exporter Xcoal Energy & Resources.

"Ned Goodman and Ernie Thrasher bring some mining expertise to the board, which wasn't there," said Michael Sprung, president of Sprung Investment Management, another shareholder.   Continued...

Barrick Gold Corporation Founder and Chairman Peter Munk attends a news conference in Toronto, December 4, 2013. REUTERS/Aaron Harris