John Thornton looks on Barrick Gold Corp. like a patient finally ready for discharge from hospital and going to abandon the fast living that landed it there.

Barrick Gold Corp has returned on top as Canada’s best-performing stock and also the world’s most valuable gold company

Barrick Gold Corp. has surged to become Canada’s best-performing stock like a two-month rally in the precious metal gives added lift towards the company’s turnaround efforts.

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In his first on-the-record interview in several months, the executive chairman of the world’s largest gold producer discussed all of the hot-button issues – from his perspectives on acquisitions and disposals towards the sprawl of his board to his own controversial pay packet.

Criticized for lacking industry experience, the 62-year-old banker-turned-miner could be forgiven if he made a decision to gloat: on his watch Barrick has transformed from market casualty to darling, culminating with a peer-beating 82 percent stock surge this season. A big-picture guy, he speaks in entire paragraphs from the mile above ground where the way forward is clear: it’s time for Barrick to get off the defensive, albeit cautiously.

“When you’re coming out of intensive care, both for the great of your health and for purpose of reputation, it’s extremely important to be clear and transparent about what you’re doing,” he explained in Ny on Wednesday. “All of those things argue for going slowly.”

Deal Discipline

Thornton’s stated goal would be to make Barrick one of the best companies on the planet this century, in any industry, which means beginning to consider acquisitions. Senior executives have been running through deal scenarios to “exercise the muscles.”

To be sure, the organization is “nowhere close” to an acquisition despite the fact there aren’t any shortage of opportunities amid what had, up to now, been a four-year downturn for gold. “The very first thing we do absolutely should be successful,” Thornton said.

What the company can’t afford is yet another fiasco. In 2011, Barrick expanded its copper footprint with the $7.3-billion acquisition of Equinox Minerals Ltd., swelling its debt as high as US$15.8 billion in 2013. The deal was the single biggest factor that led to a long and painful restructuring. In September, Barrick said hello would close the unit.

Since 2013, Barrick has cut assets, jobs and costs and adopted a decentralized model more similar to a tech firm than a miner. Debts are right down to US$10 billion and also the clients are looking to halve that within the medium term. Asked if he’d consider expanding beyond gold when the company opens its wallet, Thornton said now you ask , “in almost any meaningful time period academic: the answer is no.”

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Asset Sale

Until now, Barrick’s divestment program has excluded its best assets, but Thornton suggested not every preferred properties are untouchable. “Should you define a core asset as a first quartile asset – whatever that definition is – obviously you won’t ever want to sell those,” he said, before adding: “Barrick’s so-called core assets, they’re not all equal.”

Thornton is unapologetic about the company’s quarterly dividend, which peaked at 20 cents in 2013 and it is currently two cents. “Priority one is obtain the debt down. Until we’re inside a healthier financial position, we’re not likely to touch the dividend.”

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Pay Solution

Investors can get imminent changes around the most contentious issue of Thornton’s brief tenure: executive pay. At last year’s annual general meeting, more than 73 per cent of shareholders voted against a non-binding pay resolution, largely spurred on by his US$12.9-million package for 2014.

“Whenever we said last year we will fix this, we’ll fix it. In fact we have fixed it. We haven’t actually announced it – but we’ve fixed it.” Investors are to discover the details in a regulatory filing on March 24.



If the news means he will be earning less, the money he’s made on Barrick’s recent stock rally may lessen the sting. Thornton owns about 2.Two million shares, 160,000 which were bought at no more December, before gold rebounded and Barrick catapulted higher. “I’m still a purchaser,” Thornton said. The day after the interview he made good with that promise, buying 300,000 shares. 

On Monday, Barrick gained 2.5 per cent to $18.70 at 10:08 a.m. in Toronto.

Also on Thornton’s to-do list is managing the transition to a leaner board. As of Barrick’s AGM this April, it’ll have 14 directors, with eight joining since he became chairman. Anything over 12 is simply too large, he states.

What he can’t manage, obviously, is price. Barrick considers itself “gold price agnostic,” and runs more conservative price models than its two biggest competitors Goldcorp Inc. and Newmont Mining Corp. Thornton says his goal would be to guarantee shareholders a safe return, having a healthy dividend as well as an occasional “windfall” based on market swings.

When all has been said and done, nothing fascinates Thornton that can compare with China. As chairman of Goldman Sachs Asia, he rebuilt the firm’s Chinese business within the late nineties. Nowadays, he’s a professor at Tsinghua University and flies to China monthly.

Both Thornton and Barrick President Kelvin Dushnisky have been effusive in their praise of Zijin Mining Group Co., the company that Barrick made a partnership at the Porgera mine in Papua New Guinea. He talks of a relationship based on mutual respect and benefit, and including a heavy mentoring component from Barrick.

‘Trust Me’

As a case in point, Thornton says he warned Zijin against wading in and buying Porgera outright, telling executives: “Believe me, when you go see it, it’s likely to scare the hell from you.” Instead, he provided to let Zijin discover the ropes gradually with Barrick management in position. Sooner or later, not soon, he expects Zijin tends to buy the remaining Half.

In the meantime, “they’ve been everywhere, they’ve seen everything,” of the Barrick empire. Thornton believes, someday, Zijin may help turn Barrick’s greatest problem child, Pascua Lama, right into a success by spreading the financial and political risk. The giant project in the Andes continues to be shuttered since 2013, whenever a Chilean court accepted an injunction filed by indigenous groups over environmental concerns.

Thornton is quick to dismiss the issue of whether Zijin or any Chinese investors could take a substantial curiosity about Barrick itself. Although headquartered in Canada, its best assets have been in Nevada, near military bases, and that he believes the Committee on Foreign Purchase of america would reject any Chinese bid.

As for any takeover attempt nearer to home, Thornton highlights that Barrick has regained its place as the most valuable gold producer, which makes it unlikely anyone could afford it. 

“Nothing we’re doing is for the objective of shining ourselves on the market. Like any public company of course, by definition, if a person wants to walk in here and set a large price on the table we’d need to take it seriously. However i see zero proof of that.”

Bloomberg News

Northair and Kootenay Combining to Create Mexican Silver Consolidator

Northair Silver Corp (TSXV.INM) has a NI43-101 compliant silver resource at its La Cigarra project in Chihuaua State, Mexico; only 20 kilometers from two large producing mines which have been mining silver for hundreds of years. The organization also has 2 million dollars in its treasury and it is President & CEO, Andrea Zaradic is confident that La Cigarra will “be a mine one day”.

So how come a combination with Kootenay Silver Inc. (TSXV.KTN)  another Mexican silver explorer with two promising silver assets in Sonora State, seem sensible at this time in the market cycle?

Zaradic, a mechanical engineer by training, took over as CEO of Northair in 2014 but she has had her eye around the company for much longer. “In 2012, as i was the CEO of a company called Troon Ventures Ltd., which was a cashed up shell, looking to acquire mining assets, I traveled to the Parral Mining District in Mexico to go to Northair’s La Cigarra silver project.  It quickly became apparent that this was a good thing with substantial merits and really separated itself.”

Shortly thereafter, Zaradic led Troon Ventures right into a successful merger with Grenville Strategic Royalty Corp (TSXV: GRC) where she currently serves as an independent director.  Now free of her Troon CEO duties, she was able to transition into Northair once the very long time CEO decided to retire in 2014. “I was very looking forward to the opportunity at Northair and the potential to make further discoveries at La Cigarra.  Soon after registering with work with the organization, a window opened out to complete a financing and that we managed raise $4 million dollars. These new funds allowed Northair to update the mineral resource estimate in January 2015 increasing the tons and grade of the deposit, develop a metallurgical program which we reported in June 2015 in addition to conducting an airborne geophysics program, which identified several new exploration targets around the property.  In addition to having a great project, Northair is based on the neighborhood community which is considered a mining friendly jurisdiction and home to people who’ve been mining all their lives.”

But there was a problem. Silver prices had been steadily declining with them the Northair share price. “We were a little distraught due to the silver price. We had to take serious steps due to the market. We cut our overhead, our staff, our G&A. That has left us two million dollars in our treasury.”

Zaradic is really a deal maker. She set the wheels moving for the reverse takeover of Troon, and she was instrumental in the merger of Magma Energy & Plutonic Power (now Alterra Power). She is also something of a student of economic history.

“Silver consolidation works.” she said. “Silver Standard, First Majestic and Pan American are caused by silver consolidation once the cost of silver was depressed in the early 2000’s. Pan American went from $2.50 a be part of 2000 to $41.00 per share in 2008, First Majestic went from $.05 to $23 and Silver Standard went from $1.25 to 37 dollars all for the reason that same period.”

With metal prices low, Zaradic believes that what went down from 2000 to 2008 could happen again in gold and silver. “We see First Mining Finance (TSXV: FF) within the gold sector buying gold assets, climbing to a market cap of +$100 million in an exceedingly short time. The marketplace likes consolidation. Since we announced our deal with Kootenay on January 13 our share price has doubled.”

For the consolidation strategy to work Zaradic believes companies have to grow once the metal prices are depressed so they are large enough to leverage what she sees being an inevitable rebound within the silver price. When silver prices dragged along in 2015, Zaradic, like a strategic exercise started to take a look at other silver companies just as those companies were looking at Northair to find a fit.

Kootenay Silver was certainly a fit on an asset basis and geographically having its flagship silver property in Mexico too. At that time the transaction was announced Zaradic stated, “La Negra and La Cigarra represent two of the highest profile new silver discoveries amongst non-majors in Mexico. The continued exploration successes at our flagship projects put the combined company inside a strong position, distinguishing us from our peers.”

Zaradic says “The combined company come in a powerful financial position to complete its consolidation plan while simultaneously advancing its flagship assets.  A situation that will be bolstered by a $2,000,000 investment into Kootenay by Pan American included in a choice agreement on Kootenay’s Promontorio Mineral Belt silver properties. An agreement which brings not only the investment but also as much as $16 million US of expenditures and payments to Kootenay plus a pathway to production in the form of a 25% carried to production interest.”

The option agreement between Kootenay and Pan American was announced February 16, with closing anticipated early March 2016 and also the direct investment by Pan American may increase to nearly $3.3 million post-Northair acquisition closing. “Pan American is one of the largest silver producers in Mexico.” said Zaradic “It has tremendous operating experience in Mexico and Kootenay’s Le Negra deposit is extremely attractive given its closeness to one of Pan American’s operations which is starting to run out of material.”

Upon closing of the transaction with Kootenay, Northair shareholders will get, for each common share of Northair held, 0.35 common shares of Kootenay, plus 0.15 of the tradable warrant to buy Kootenay common shares at an exercise cost of $0.55 for five years from closing. Upon completing the Transaction, Northair will end up a wholly-owned subsidiary of Kootenay, and former shareholders of Northair will hold approximately 40% from the shares of Kootenay with an outstanding shares basis.  If Zaradic is right about silver consolidation and if the history of the 2000 to 2008 run were to repeat itself, the company shares have significant homer potential.

Once the transaction forwards and backwards companies is finished, plans call for further consolidation along with drilling and exploration at La Cigarra underneath the Kootenay management team and growth of the Promontorio Mineral Belt silver resources underneath the option agreement with Pan American.

Zaradic herself will keep her involvement like a director of Kootenay. “This is the initial step within our growth means of silver consolidation.” said Zaradic, “We likely have turned the corner around the silver price. In a year or two or maybe three the price of silver should rise.”

When it does, Northair shareholders will be in position to take full benefit of the potentially explosive growth in a well leveraged Mexican silver consolidator.

At duration of writing Northair was trading at $.09 with 150.A million shares outstanding and a market cap of $13.51 million. Kootenay was trading at $.26 with 79.4 million shares outstanding and a market cap of $20.25 million.

[Both Northair and Kootenay is going to be attending the PDAC Conference in Toronto March 6-9. Andrea Zaradic is going to be presenting at the National Post Investor Forum Monday March 7.]

OTTAWA – The financial institution of Canada is issuing a warning about email and social media scams which are claiming in the future from the bank.

Canada’s central bank says the scams are utilizing its logos and letterhead without authorization and misrepresenting it.

The Bank of Canada says it does not accept deposits from individuals or on behalf of them, nor will it collect personal or financial information from individuals through email.

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The central bank also doesn’t request personal or financial information through social media messaging applications.

The Bank of Canada says for those who have concerns about any Internet-based communication that proposes to be from the bank, you should delete the content and phone your local authorities.

It warns to not follow any links included in the message and instead access the Bank of Canada’s website by typing the address yourself.

TORONTO – An increase in food prices has widened the cost divide between Canada’s supermarkets as well as their discount divisions – an issue that could play out in Loblaw Cos.’ favour.

“Looking at identical items, the discount channel doesn’t have the symptoms of increased shelf prices to the significant degree, as the conventional channel has significantly increased shelf prices,” analyst Keith Howlett of Dejardins Securities wrote within an industry report Monday after an assessment of grocery price fluctuations between retail channels. “We also note a greater diversity of pricing on identical items between competitors in the same channel inside the same trading area.”

Howlett anticipates the pricing gap between discount and conventional channels will move toward equilibrium within the next four to six weeks.

But among public grocers, “this duration of pricing confusion favours leader in the industry Loblaw,” given its scale relative to other players and its large network of discount stores, No Frills.

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“We would expect customer traffic to shift temporarily toward the discount and club channels until required price increases are implemented across all channels in the coming weeks,” the analyst said. Howlett rates Loblaw like a buy having a target cost of $76. Also, he has a buy on Metro Inc., operator from the discount chain Food Basics, at a price target of $44.

Grocery price inflation, which climbed 4.1 percent nationally around the fourth quarter according to Canada’s Consumer Price Index, has been aggravated by a weak Canadian dollar. Food prices have become a warm button topic among consumers in recent months, having a Canadian price peak for cauliflower in January drawing international attention.

On a conference call with analysts last week to go over fourth-quarter results, Loblaw president Galen Weston said the retailer was experiencing “disproportionate momentum” in the discount side of their business.

“The most illustrative example of that’s in Alberta, and the good news for all of us in that province is the fact that we’re really well-positioned in terms of discount, and so I don’t wish to say that’s entirely helpful, but certainly I think we’re more insulated in the impact than the others,” Weston said.

Financial Post

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Valeant Pharmaceuticals International Inc. is under investigation through the U.S. Filing in a previously undisclosed probe, the organization said on Monday, capping a tumultuous 24-hour period that saw the firm announce the return of its CEO and also the cancellation of an earnings announcement.

The SEC probe is outside of an existing investigation right into a company purchased by Valeant this past year, Salix Pharmaceuticals Ltd., said a person acquainted with the matter. The person declined to discuss the record since the matter isn’t yet public.

It’s unclear what the new probe is centered around.

“Valeant confirms that it has several ongoing investigations, including investigations through the U.S. Attorney’s Offices for Massachusetts and the Southern District of recent York, the SEC, and Congress,” said Laurie Little, a Valeant spokeswoman.

Judy Burns, an SEC spokeswoman, declined to discuss the new probe.

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At the time from the mid-afternoon revelation, shares were already down by more than ten per cent after company postponed its pre-market earnings report and withdrew its 2016 guidance following the announcement on Sunday that leader Michael Pearson would be retaking the helm.

Pearson is viewed as integral towards the drug maker’s strategy and execution, and his return following a two-month leave of absence because of severe pneumonia had generally been seen as an positive development.

It also suggested the board is confident in Valeant’s capability to move past recent controversies, such as inadequate financial controls, questions about its broader strategy, and allegations it inflated revenues although the mail order pharmacy Philidor Rx Services.

But the postponement sparked concern among already nervous investors.

“We happen to be worried about the feasibility from the guidance range for many time-” said Irina Koffler, an analyst at Mizuho Securities USA. “We think investors should just delete all comments from recent investor meetings and calls and brace themselves to have an entirely new story.”



Valeant shares fell further in afternoon trading around the TSX, ultimately closing down $15.34, or almost 14 percent, at $94.49.

The stock is down more than 35 percent since Pearson stepped from the company at the end of December. It has lost more than 65 percent of its value previously six months, after briefly becoming Canada’s most valuable company.

Valeant suggested it chose to withdraw guidance and delay its results because Pearson continues to be unable to review and sign off prior to their release.

“I realize that recent events are disappointing to everyone which is my responsibility to create the appropriate tone for that organization,” Pearson said in a statement.

Even prior to the SEC revelation, analysts were cautious around the firm’s outlook.

Douglas Miehm at RBC Capital Markets believes an investment community will be pleased to see Pearson’s return before audited answers are presented and also the random committee completes its overview of Valeant’s financial reporting and internal controls.

“Having said this, we have seen the overall approach to rescheduling Q4 and withdrawing guidance after reiterating it in January as likely to carry excess fat until Mr. Pearson has been able to get in touch with the Street and supply some clarity,’ Miehm said inside a research note.

As a result, the analyst expects Valeant shares is going to be weak until there is certainty about its Q4 release, committee report, and 10-k filing.

TD Securities downgraded Valeant to hold from buy to reflect the lower visibility going forward.

“We believe that the recent developments have the possibility to exacerbate what has already been a protracted decline in investor confidence,” analyst Lennox Gibbs told clients, cutting his price target around the stock to US$110 from US$155.

Although management didn’t disclose the actual drivers behind the decision to withdraw guidance, Gibbs suggested Philidor accounting, the transition to a new fulfilment program with Walgreens and on-going Federal investigations could all be responsible.

Moody’s Investors Service on Monday placed its ratings on Valeant’s debt under review for any downgrade. It cited concerns the company’s performance is weaker than previously expected, which may impede its deleveraging plans.

“Valeant is confronting significant scrutiny on its pricing practices, including those found on products acquired through acquisitions, and uncertainty related to government investigations,” Moody’s said.

Valeant also said it will split up the chief executive and chairman roles, with board member Robert Ingram overtaking the second position from Pearson – an incremental step to improving corporate governance.

“Our hope is that the Ad Hoc Committee will be able to conclude its efforts soon in relation to financial reporting and internal control matters, so we can all focus on building the best company we are able to,” Ingram said inside a statement.

Valeant’s former chief financial officer, Howard Schiller, who served as interim chief executive in Pearson’s absence, will transition from that role but remain on the board.

Financial Post and Bloomberg News

CALGARY C The British Columbia government stands to gain $2.9 billion per year if three liquefied natural gas vegetation is built on the province’s coastline, according to a new report funded by one of the LNG project proponents.

The Conference Board of Canada noted in a new report, paid for with a subsidiary of Malaysia’s state-owned oil company and LNG proponent Petronas, that “there is a superb amount of uncertainty all around the number, size and timing on the projects that might proceed as the (LNG) industry is constantly on the develop.” However, the Monday report suggests that this kind of industry could reduce the province’s unemployment rate and boost economic activity.

The think-tank’s report noted that three LNG projects, with a cumulative creation of 30 mega tonnes of LNG each year, could generate $6.2 billion in revenues for multiple levels of government and produce more people into B.C., boosting the province’s inflation rate by about 0.25 per cent.

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The Conference Board did note that no projects happen to be sanctioned yet, and for that reason none are currently under construction.

Last week, AltaGas Ltd. announced it absolutely was unable to find enough people to buy LNG from its proposed Douglas Channel facility and the company shelved the work consequently.

Douglas Channel LNG was widely one among the projects that appears to be built in B.C. Analysts now say the company’s wherewithal to find sufficient customers for a smaller scale LNG project is a bearish sign for the larger projects.

“We have made significant progress in development and permitting of the project, and that we believe the work could deliver LNG to Japan at very competitive prices. However, with no meaningful off-take agreement, the consortium can’t continue the introduction of the work,” AltaGas CEO David Cornhill said during his company’s fourth-quarter earnings call.

AltaGas is partnered with Tokyo-based Idemitsu Kosan Global on the project, which was originally scheduled to become cooling gas to the liquid state for export by 2018. AltaGas didn’t give a timeline for when it might revisit the Douglas Channel LNG project.

In February, Royal Dutch Shell PLC said it expects to make a final investment decision on its LNG Canada project near Kitimat later this year.

Petronas, which funded the report through its Calgary-based subsidiary Progress Energy, announced last year it would build its North american LNG project when the province’s LNG taxes were manageable and pending the end result of environmental reviews, that are still ongoing.

Financial Post

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Lending Loop, a Canadian fintech firm which was extending U.S.-style peer-to-peer crowdsourced loans to small businesses, has stopped posting new loan requests on its website although it meets regulators to ensure its model “complies with all of applicable laws.” 

A notice to that effect was posted around the company’s website Tuesday. 

The halt within the posting of recent applications through the marketplace lender was characterized as “voluntary and temporary” and “an act of excellent faith.”

The notice did not name the regulatory authorities Lending Loop is within discussions with, however the Ontario Securities Commission issued a public notice to all marketplace lenders this past year, urging these to seek legal and regulatory advice to make sure their operations were adhering to securities law or relying on appropriate exemptions.

Lending Loop launched in October and the founders were coy about how exactly the firm could offer U.S.-style peer-to-peer lending. The model allows a person with $50 to pool their cash in larger loans that are extended to small businesses. 

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Other marketplace lenders such as Borrowell and Grouplend, that is now called Grow, opted to tap only  institutional and well-heeled “accredited” investors to back loans to guarantee they are onside with regulators. 

Cato Pastoll, one of the founders of Lending Loop, said his firm’s peer-to-peer model was well-liked by people who don’t meet the income and asset thresholds to be considered accredited investors. After launch, Lending Loop quickly attracted interest from 450 individual lenders, with 100 becoming active participants, Pastoll told the Financial Post in November.

In an email Tuesday, he explained he was not able to comment around the regulatory discussions.

Lending Loop’s website notice indicates the upstart will continue to fund new loans with capital that is separate from its lending platform although it continues talks with regulators. 

“Additionally, Lending Loop continues to service all funded loans, and all sorts of existing lending partners will be able to access their Lending Loop accounts and withdraw available funds at no cost,” the notice says.