Barrick Gold Corporation is the most significant gold mining firm on the globe. The company is based in Toronto, Ontario, Canada. Though the firm has mine operations in more than ten different countries, more than three-quarters of the firm's gold production is from the Americas region. The company has grown into a globally-renowned firm due to the exponential increase in the demand for god in the world market.
On a side note, I'm finding that many gold mining companies are located in Toronto. For example, we just published this piece on Kinross Gold Corporation.
The company is also involved in the sale of copper and other related activities such as mine development and exploration. Barrick Gold corporation stock is listed on the Toronto and New York Stock Exchanges. Barrick Gold subsidiaries currently undertaking exploration and mining projects in Canada, the United States, Australia, Dominican Republic, Chile, Peru, South Africa, Russia, Colombia, Pakistan, Argentina, and Tanzania. Barrick Gold subsidiaries also boast the gold industry’s only A-rated balance sheets and the largest gold reserve and market capitalization. The company has given rise to millions of Barrick Gold jobs.
Founding and Early Years of Barrick Gold
Barrick Gold has its roots in Barrick Petroleum Corporation, which was founded in 1980 and the Barrick Gold Ticker was unveiled. The company’s name was changed twice, eventually being named Barrick Gold Corporation fifteen years later in 1995. Hungarian-born Peter Munk was the founder of Barrick Gold. Peter, whose family fled from Germany to Canada in 1948, founded the company along with his long-time partner, David Gilmour, and a few Arab investors. Peter is Barrick Gold CEO.
The team, in 1983, turned the firm’s efforts into prospecting and turned into the prototypical success story they now are. The firm began by acquiring mines that were already established and turning them into more profitable endeavors that produced more gold and hence an improved return on investment. The company went unnoticed until Peter Munk, Barrick Gold CEO,and David Gilmour sought to acquire Viking Petroleum. After purchasing the oil mining corporation, the partners began working with the renowned D.O. Nelson to explore new oil mines.
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To their disgust, the newly forged partnership was not able to find any new gushers, and the industry was quickly bottoming out. It is then that Peter Munk decided to invest his corporation's resources in precious metals, with gold being his top priority. Consequently, the new Barrick Gold ticker corporation went public on the Toronto Stock Exchange with 1.3 million shares in May 1983.
The partners’ strategy was to become the leading gold corporation in the industry. They planned to achieve this great feat by becoming America’s largest gold producing company. They went on to acquire gold mines with sound features while being fiscally conservative and initiating an aggressive hedge fund program to protect the bottom line.
The company’s strategy came into play just months after going public. In their initial endeavors, the firm purchased a 23% gold deposits stake in Valdez Creek Region in Alaska. They then partnered with the city of Juneau and Alaska Power & Light to explore more than two dozen gold mining sites.
Barrick gold’s first acquisition is mined named Renabie near Wawa, Ontario, that was able to produce 16,000 ounces of gold on average in 1984. In the same year, Barrick purchased Camflo Mining Inc., which conducted its operations in Quebec province and the state of Nevada in the U.S. This led to the creation of thousands of Barrick Gold jobs.
The company became the largest gold mining corporation in the world after acquiring Lac Minerals in 1994. Lac Minerals owned several mining properties in both North America and South America. As a result, Barrick Gold corporation stock increased in price.
Following Placer Dome’s lead, the company went into Africa in 1999 and soon acquired Sutton Resources. Sutton was an already established gold mining company in Tanzania. The firm had been wanting to explore the Bulyanhulu site, located in North-Western part of Tanzania. The site is famous for being home to the largest gold deposit in East Africa. It has reserves of up to 8.5 million ounces of outstandingly high-quality gold.
Barrick has acquired several properties in the Tanzanian gold-mining industry. In 2006, The Barrick Corporation acquired the North Mara Mine. This acquisition was most probably due to their purchase of Placer Dome.
Barrick also acquired the Tulawaka mine in Tanzania, a joint project between Northern mining explorations and Pangea Goldfields, a subsidiary of Barrick Gold Corporation. The mine had begun operations in the first quarter of 2005.
The Placer Dome Acquisition
On the 31st of October, 2005, Barrick Gold launched its takeover bid for rival Canadian gold mining firm, Placer Dome. The bid was valued at $9.2 billion. Initially, Placer Dome recommended that shareholders reject the offer. However, in December the same year, the company’s board of directors moved to accept an improved offer from Barrick Gold worth $10.4 billion. The acquisition was completed in 2006, effectively making Barrick the largest producer of gold in the world.
Barrick Gold’s Recent Ventures
Launching what was Canada’s largest stock offering till then, Barrick brought a $3 billion equity offer in the Toronto Stock Exchange in 2009. The offering increased to $3.5 billion the following day while responding to demand of the world market. The profits accrued from the deal were utilized to get rid of the company’s strict gold hedges. The move restricted the selling cost of production in the future instead of selling it at market price.
In 2010, Barrick Gold announced its plans to have a separate firm that would manage its assets in Tanzania. The company was named African Barrick Gold and was traded on the London Stock Exchange in March the same year. Barrick Gold would, however, retain the largest share of the stake in the new company. The new firm had an initial IPO rating of $3.6 billion. The company was later listed to the FTSE 100 Index in June 2010.
In mid-2011, Barrick Gold beat a takeover bid for Equinox Minerals from China Minmetals. This went to show how established Barrick had become in the gold mining industry.
In 2017, Barrick Gold accepted an offer from Shandong Gold to acquire a 50% interest in Barrick’s Argentina’s Veladero mine. This deal followed an agreement between both firms to invest about $300 million into each other’s shares. Barrick Gold bought shares in Shandong Gold through the Shanghai Stock Exchange while Shandong Gold bought Barrick’s shares through the Toronto or New York stock exchange.
In September 2018, Barrick Gold Corporation announced a merger with Randgold. The share-to-share merger was a result of a deal that was estimated at $18.3 billion. According to the terms of the agreement, Barrick Gold is expected to have 67% of the joint venture. The agreement came into effect in 1st January 2019.
On the 1st of July 2019, Barrick Gold, together with Newmont GoldCorp, launched Nevada Gold Mines. This marks Barrick’s most recent venture.
Renewable Energy
Barrick Gold Corporation installed the highest-situated wind turbine in the world at the Veladero mine in the province of San Juan, Argentina, in 2007. The wind turbine is situated at nearly 4,200 meters above sea level.
The company has also made a request to the environmental authority of Chile to expand a wind farm project from ten to eighteen wind turbines. Consequently, the farm would contribute 36 megawatts to the country’s national power grid.
In Nevada, Barrick Gold operates a solar panel project with an output of 1 MW. The company also has plans to construct a 9-turbine wind farm in Montana after the operation ends.
Local initiatives by Barrick Gold
Barrick Gold negotiated an agreement with five regional tribes from Western Shoshone in 2008, offering to provide financial support for education, including long-term scholarship programs. The Tahitian Nation in British Columbia had also seen sustainable development when the company was in the administration of the Eskay Creek mine for eight years from 2001 to 2008.
Barrick became the 18th company to partner with the Principles on human rights and security in 2010. The organization provides guidelines to mining companies to maintain the safety and security of their operations concerning fundamental human rights and freedoms.
Barrick Gold Corporation also participates in several CSR programs. Those programs include the UN Global Compact, the Extractive Industries Initiative, the Global Reporting Initiative, and the Global Business Coalition on Tuberculosis, Malaria, and HIV/AIDS.
The company is also an International Leadership Council of The Nature Conservancy member. The conservancy, led by Barrick Gold Corporation, participated in developing a wildlife conservation park in the Kaijende Highlands.
Related Reading: Have You Considered Adding Gold to Your Retirement Portfolio?
Alleged Misconduct and Human Rights Violations
In the gold mine in North Mara, Tanzania, security guards employed by Acacia mining, which Barrick Gold owned 64% at the time, shot and killed upwards of 20 people in 2014, injuring another 69 individuals. Human rights officials in Tanzania estimate that more than 300 civilians have been killed in relation to the operations in the mine since 1999. However, no Acacia security guard has ever been killed while on duty.
After a visit to North Mara in September 2017, the international jurists council said that it was “deeply troubled by the gravity of the allegations and the difficulties experienced by locals when accessing adequate reparation and remedy.
In the country of Papua New Guinea, the private security installed at Barrick Gold’s Porgera mine was reported to carry out repeated acts of gang rape and other violent abuses. This is according to a report published by the Human Rights Watch in 2011.
Forms of violence reported allegedly instigated by the security force included murder, arson, sexual abuse, forcible evictions, and many more forms of physical and emotional violence against the local community at the Porgera Joint mine. According to the report, these crimes had gone unresolved for seven years.
Most of the tension between the mining company and the local community at Porgera is caused by some of the impoverished locals trespassing on Barrick’s property to scavenge for leftover pebbles of gold in the dumps of the mine.
Barrick, however, participated in resolving the situation by conducting an internal investigation of the security personnel. Several individuals were arrested after the investigations, and such crimes have been rare in the area since then.
Women who were raped by the mine's security guards received indemnities from the company, therapy, relocation, job training, and funds for child education.
According to Sarah Knuckey, the Director at the Human Rights Clinic at Columbia Law School, the rapes were some of the most vicious she had ever investigated. Eleven women rape survivors from the region rejected the initial offer from Barrick of not more than $6,000 each. After they had obtained legal counsel in America, Barrick offered significantly larger settlements.
Amnesty International gave a report in June 2014 that security guards from Barrick Gold at the Porgera mine had torched more than 150 houses in the area. The homes were torched during a raid conducted by the mine’s security personnel. One of the police officers in the raid claimed that Barrick had ordered that the homes be torched.
Tax Evasion
A tribunal formed by the Tanzanian government ruled that Barrick Gold Corporation had come up with a sophisticated tax evasion scheme in 2016. Acacia Mining was subsequently fined a whopping $190 billion for reducing their actual export revenue figures from Buzwagi and Bulyanhulu mines from 2000 to 2017. According to John L. Thornton, the chairman at Barrick, Acacia never filed their income taxes to the Tanzanian government.
The Journalists for Free Expression from Canada reported in 2017 that Tanzanian journalists had been persecuted for reporting on tax evasion claims by Barrick Gold and other agencies working with the gold mining giant.
Barrick Gold lost the tax evasion battle to the Tanzanian authorities, paying a fine of $300 million. After the endeavor, Barrick Gold and the Tanzanian government created a joint venture in which the government has 16% stake and a 50% share of the revenue.
Corruption
Starting in 2013, Acacia Mining was reported to bribe several Tanzanian government officials responsible for land valuation near North Mara gold mine, which the firm was interested in acquiring. The alleged bribes were estimated at a total of $400,000. The bribes were purportedly paid in cash. One of the officials who was entangled in the bribery claims stated that Barrick prevents him from spilling the arrangement details.
Tanzanian officials have also charged three Barrick Gold affiliates with forgery, conspiracy, organized crime, corruption, and money laundering. Though Barrick insisted on the legality of the payments, The Wall Street Journal published that the UK Fraud Office had reopened the investigations into Barrick’s operations in Tanzania.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started this website to share his expertise in using his Self-Directed IRA. Most recently he's been advising individuals to diversify into precious metals ahead of a certain recession. He invested with Goldco.
