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UPDATE 1-Barrick Gold signals its founder, Peter Munk, to step down

Euan Rocha
Friday, 8 Nov 2013 | 12:53 PM ET

TORONTO, Nov 8 (Reuters) - Barrick Gold Corp signaled on Friday that founder and Chairman Peter Munk will step down sometime before the company's annual meeting next year, a move that would follow prolonged investor pressure for changes on the gold miner's board.

Munk, 86, has always driven Barrick's agenda: he started the company in 1983 and forged it into the world's largest gold producer. But recent missteps have raised questions about the leadership of a man once viewed as a mining-industry visionary.

In an amended regulatory filing relating to its recent $3 billion equity offering, Toronto-based Barrick said it is working to address corporate governance concerns raised by its top shareholders.

"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," the filing said.

Barrick said it intends to update the market before yearend on these initiatives, with governance changes expected to take effect in conjunction with Barrick's next annual meeting. This year the meeting was in April.

To be sure, Barrick has hinted at Munk's near-term departure from the board in the past, but the company has so far been less explicit about the timing of his exit.

Barrick faced a minor shareholder revolt at this year's annual meeting, with some 85 percent of its shareholders opposing its nonbinding resolution on executive compensation.

The revolt began after a group of Canada's top pension funds said they opposed Barrick's $11.9 million signing bonus for Co-Chairman John Thornton, the man tipped as the miner's next chairman.

Adding to the discontent, Barrick has been plagued by problems for months, prominent among them the ballooning capital costs at its key growth project, Pascua-Lama, a mine it has been trying to build high in the Andes Mountains on the border of Chile and Argentina.

Last month, Barrick said it would stop development of Pascua-Lama indefinitely, a surprise reversal on a project that has already cost it more than $5 billion.

While the troubles at Pascua-Lama have been the biggest drag on Barrick's share price, investors have taken most umbrage with its disappointing push into copper through its C$7.3 billion ($7 billion) takeover of Africa-focused copper miner Equinox in 2011.

Several sources familiar with the matter have told Reuters that Munk himself played a pivotal role in pushing for that deal.

Barrick shares, which had fallen 45 percent year to date as of Thursday's close, were down 1 percent at C$18.79 on the Toronto Stock Exchange on Friday afternoon.

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