* Munk says company remains focused on being top gold miner
* Says it would be foolish for Barrick to give up primacy
* Shares on NYSE, TSX turn positive following reassurances (Adds comments from AGM, details on share price move)
By Euan Rocha
TORONTO, April 27 (Reuters) - Peter Munk, the founder and chairman of Barrick Gold, told investors at the annual meeting on Wednesday that, notwithstanding the company’s bid for copper miner Equinox, Barrick remains firmly committed to being the world’s top gold miner.
Barrick (ABX.TO) has seen its stock punished this week following a surprise C$7.3 billion ($7.7 billion) bid for Equinox Minerals EQN.TO. Critics have slammed the deal as risky and argue it could harm the price-to-cash-flow multiple that investors attach to Barrick’s stock. [ID:nN26262302]
Barrick has lost about $6 billion in market capitalization, or almost 10 percent of its value, since announcing the Equinox deal on Monday.
“We would be foolish, suicidal and totally wrong to our heritage and to what we believe in, if we ever, ever, ever contemplate letting go for a single second of our primacy in the gold industry,” said Munk, 83, who founded Barrick back in the early 1980s.
“Let me just say to you categorically and hear me loud and clear,” said Munk. “There is no one better and never has been anyone better in the gold industry. Do not think that something that we have worked for these 28 years and something that we are as proud of and as committed to is going to be given up.”
Munk, who is one of the most well-respected figures in the gold industry, assured investors that Barrick would continue to focus on developing its gold assets and remaining on top in the gold sector.
“Who is so idiotic to kill the goose that laid the golden egg -- and some golden egg this is. We are not going to give it up,” he said.
Barrick shares, which continued to trend lower even after it reported strong quarterly results on Wednesday, finally turned around in afternoon trading, following Munk’s assurances. [ID:nN27110953]
The shares were up 36 cents at $50.55 in New York, and ahead 41 Canadian cents at C$48.16 in Toronto.
Munk said the bid for Equinox was a logical move given the amount of free cash flow the deal would generate for Barrick. He argued that it would be foolish for the company to have passed on the opportunity to acquire Equinox given the long-life assets it would bring into Barrick’s portfolio.
“We have copper and copper requires the same skills,” said Munk. “Wherever we go today, gold and copper go hand in hand: same skills, same people, same know-how -- exactly the same.”
Barrick’s bid for Equinox trumped a C$6.3 billion offer from Minmetals Resources (1208.HK). While many expected Minmetals to come back with a counter-offer, the Chinese metals trader bowed out of the race, saying Barrick’s bid was too rich. [ID:nL3E7FQ05D]
Munk said that, given current low interest rate conditions, the Equinox deal looks compelling, as it allows Barrick to expand its assets base without diluting any of its gold exposure.
Gold, meantime, touched an all-time high of $1,523.44 an ounce on Wednesday after the the U.S. Federal Reserve announced it was in no rush to raise short-term interest rates. [ID:nLDE73Q29K]
“This company will continue to take advantage of what I and the board see -- the coming increase in gold price,” said Munk.
$1=$0.95 Canadian Reporting by Euan Rocha; editing by Rob Wilson