By Euan Rocha, Allison Martell and Koh Gui Qing
TORONTO/BEIJING (Reuters) - Barrick Gold Corp (ABX.TO), the world's largest gold producer, is poised to announce a board shuffle and name a new chief operating officer, according to several sources familiar with the situation.
Barrick is expected to announce on Wednesday that founder and long-time Chairman Peter Munk will hand over the role of chairman to his heir apparent, John Thornton, currently co-chairman.
In addition, at least two directors will step down at the company's next annual meeting in the spring, two of the sources said.
Barrick is also expected to name new independent directors who will join its board, but those changes are not expected to take effect until the company's next annual meeting.
A spokesman for Barrick declined to comment on the changes and said the company would update the market following a board meeting on December 4.
The company has been struggling with issues at many of its key mines and projects including its huge Pascua-Lama project on the border of Chile and Argentina, and its Jabal Sayid copper project in Saudi Arabia and its Lumwana copper mine in Zambia both acquired via its C$7.3 billion ($6.9 billion) acquisition of Africa-focused copper miner Equinox in 2011.
Barrick shareholders have been unhappy with the company's track record on corporate governance. This year, shareholders demonstrated their anger by voting against Barrick's non-binding proposal on executive compensation, in particular a huge $11.9 million signing bonus for Thornton.
Three sources said Barrick has been trying for months to fill the COO position, and came close a few times, only to have discussions with some candidates break down.
Barrick, which owns a sprawling empire of mines and projects throughout North America, South America, Africa, Asia and Australia, has been without a permanent COO since Igor Gonzales stepped down earlier this year. Gonzales had been in the job for barely a year.
Barrick has recently held talks with China Investment Corp (CIC), the country's largest sovereign wealth fund, along with other investors, about potential partnership opportunities, including an investment in the company, said two sources who asked not to be named as the talks were confidential.
CIC is already a major investor in diversified miner Teck Resources Ltd (TCK-B.TO). It bought a 17.5 percent interest in Teck in 2009, when Teck was struggling after commodity prices crashed following its 2008 acquisition of rival Fording Canadian Coal Trust for about $14 billion.
Barrick faces a similar set of challenges. The price of spot gold, which peaked in 2011 at over $1,900 an ounce, has since fallen some 36 percent and is trading at around the $1,225 level. Its bet on Equinox has so far failed to pay off and costs to develop Pascua Lama, which it shelved in late October, have risen dramatically.
This would also not be the first time Barrick has tried to attract investment from China.
Sources familiar with discussions said Barrick had extensive talks to bring CIC on board as a strategic investor back in 2009 as it sought to unwind its hedge book. Talks fell apart and Barrick ended up securing the funding it needed via a $3.5 billion equity offering.
Barrick announced a similar $3 billion equity offering late in October, in order to help reduce its debt.
Sources familiar with Barrick's discussions say that the company's latest attempts to build ties with China go beyond merely securing a passive equity investment in the company.
Two sources said Barrick was interested in a deeper, long-lasting partnership with the Chinese that could include co-development and co-financing on big projects, possibly Pascua-Lama.
($1 = 1.0587 Canadian dollars)
(Additional reporting by Nicole Mordant; Editing by Janet Guttsman, Maureen Bavdek and David Gregorio)