UPDATE 2-Barrick says Munk to step down, two other directors out
Dec 4 (Reuters) - Barrick Gold Corp, under fire for a series of missteps in a tough market, confirmed on Wednesday that its 86-year-old chairman and founder will leave the board this spring, along with two other directors.
In a series of changes following criticisms that the gold mining company's board lacks independence and is too easily swayed by Munk, Barrick nominated four new independent directors. John Thornton, current co-chairman, will take up founder Peter Munk's position, as expected.
"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."
Former Canadian prime minister Brian Mulroney and retired lawyer Howard Beck, both long-term directors, will not stand for re-election at the next meeting, the world's largest gold producer said in a statement released after the market closed.
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.
Barrick, which had been promising changes at the board for several months, also named former De Beers executive James Gowans as its next chief operating officer.
The Toronto-based miner has been without a permanent COO since earlier this year, when Igor Gonzales stepped down.
TURNING TO CHINA
Thornton, former Goldman Sachs second-in-command, was brought on in part for his exceptional connections in deep-pocketed China. Observers say he could shore up Barrick by allying it with powerful investors in China.
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.
Last month's $3 billion public offering proved a tough sell, and sources familiar with the matter told Reuters that a recent filing signaling Munk's likely departure had been intended to win over reluctant investors.
Sources say Munk pushed hard for the Equinox deal, even as his management team warned against it, as he sought to transform Barrick into a big diversified miner in the mold of BHP Billiton Ltd.
The strategy could still pay off, but it has proven unpopular with many investors.
In an interview published on the Globe and Mail website on Wednesday, Munk said he had made a mistake: "We bought Equinox to increase our copper. And that was my first major mistake - entirely attributed to hubris."
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