June 7, 2012 – Republic of Mining

PwC NEWS RELEASE: Global mining industry posts record $133bn in profits in 2011 while share prices plunge

June 7, 2012

• Net profits climb 21% to $133 billion but higher costs crimp margins
• Market values fall 25%, returns to shareholders up more than 156%
• Costs surge 25%, revenues grow 26% to $700 billion
• Supply issues to dominate for at least next five years

London, 6 June 2012 – The global mining industry is facing a growing disconnect as despite record profits for the world’s 40 biggest miners in 2011 thanks to high commodity prices, investors proved fickle, demanding greater capital discipline and increased shareholder returns. A lack of confidence in the sector’s growth prospects saw market values plunge 25% to about $1.2 trillion and only six of the world’s top 40 miners saw their market value increase, according to a new report from PwC, Mine: The growing disconnect.

PwC’s analysis of the top 40 largest miners showed 2011 to be a year of polarisation. While the industry started the year strongly, company stocks significantly underperformed in the broader equity markets, losing value by year-end as a result of continuing global economic fears stemming from, among others, the ongoing European sovereign debt crisis and a projected slowdown of China’s economy.

Tim Goldsmith, global mining leader, PwC, said:

Was Regent the heavy or the fall-guy for Barrick’s missteps? – by Dorothy Kosich (Mineweb.com – June 7, 2012)

June 7, 2012

www.mineweb.com

As a new co-chairman shares Chairman Peter Munk’s workload, employees and shareholders may finally have to concede that Barrick Gold’s patriarch can’t manage the world’s top gold miner forever.

RENO (MINEWEB) – While Barrick’s ouster of CEO Aaron Regent Wednesday grabbed the lion’s share of the news headlines, the decision of 84-year-old Peter Munk, the co-founder and chairman of Barrick, to appoint a co-chairman may actually have the longer-term ramifications for the world’s top gold miner.

Over the years, Munk has been a stickler for share price performance. And, perhaps, a warning of what was on the cards for Regent occurred last month when Munk told shareholders at the Barrick’s annual meeting that the company’s share price was not satisfactory.

In 2003, Munk ousted then-CEO Randall Oliphant as a Barrick news release said, “The board made the change to address its concerns over the company’s recent performance…”

In a news release publicizing Regent’s ouster, Munk once again stressed, “We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance.”

Marathon takes action in the mining economy – by Ian Ross (Northern Ontario Business – June 2012)

June 7, 2012

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Prepping for the boom

The Town of Marathon is preparing to meet the needs of the mining industry with two new operations expected to come online within the next three years. Barrick Gold, 40 kilometres west of Marathon, is in the feasibility stage of expanding its open pit at the Hemlo complex to extend mine life by 10 years.

And just north of the town of 3,300, Stillwater Mining is now in the environmental assessment and permitting stage of its Marathon PGM deposit, expected to be ready for open pit operations by 2015.

Daryl Skworchinski, Marathon’s community services and economic development manager, has carried out a value-chain assessment to determine what does a mining economy look like, and how can Marathon fill the gaps on the supply side.

“Barrick was really helpful in letting us know where their purchasing comes from and now we’re finalizing our action plan to hit the road and do some active recruiting at the (mining) shows.”

Barrick shakeup highlights risk fears – by Pav Jordan, Eric Reguly, Jacquie McNish (Globe and Mail – June 7, 2012)

June 7, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Toronto, Rome — The dismissal of Barrick Gold Corp’s chief executive officer over the company’s long-stagnant stock price signals deepening concerns that a year-old, multibillion dollar bet on an African copper project has turned sour.

Toronto-based Barrick, the world’s biggest gold miner, said on Wednesday it ousted president and CEO Aaron Regent less than four years into the job, a period during which the company’s shares barely moved on the Toronto Stock Exchange despite a huge rally in the price of gold.

“We are fully committed to maximizing shareholder value, but have been disappointed with our share price performance,” said Peter Munk, who founded Barrick and remains the driving force of the company.

Barrick made a bold move into the copper market last year with its $7.3 billion acquisition of Equinox Minerals Ltd., but the deal alienated many investors who saw it as an expensive departure from the company’s focus on gold. Barrick shares dropped sharply on news of the deal.

[Sudbury union] Campaign calls for inquiry – by Carol Mulligan (Sudbury Star – June 7, 2012)

June 7, 2012

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Nothing will ease the suffering of two families who will mark the painful first anniversary of the deaths of loved ones in a mining accident on Friday. But an inquiry into mining practices in Ontario might provide comfort to those left to mourn for Jason Chenier, 35, and Jordan Fram, 26.

Chenier and Fram were killed when 350 tons of muck overcame them on the 3,000- foot level of Vale Ltd.’s Stobie Mine on June 8, 2011. After a nearly year-long investigation, the Ministry of Labour laid nine charges last week against Vale and six against one of its supervisors under the Occupational Health and Safety Act.

Results of a Greater Sudbury Police Service investigation are in the hands of officials in the Crown attorney office in Sudbury and there is a possibility criminal charges could be laid.

But thousands of citizens in Sudbury and beyond are pressing for an inquiry that would prevent mining deaths from occurring in the first place.