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Barrick is the best buy: Dundee’s Goodman

Tags: Barrick Gold

Long-time mining financier Ned Goodman says a controversial $11.9-million signing bonus paid to Barrick Gold (ABX-T) co-chairman John L. Thornton was fair.

Goodman, who is president and CEO of Dundee Corporation (DC.A-T), told BNN that Thornton is “an unbelievably capable guy,” and is worth the money.

“He got paid what he deserves,” Goodman said.

Back in April, leaders of several investment groups signed a letter criticizing Thornton's compensation, including the CEOs of Ontario Teachers' Pension Plan, Caisse de Depot et Placement du Quebec and OMERS, the Ontario Municipal Employees Retirement System.

"This amount for a signing bonus for a co-Chairman of the Board is, to our knowledge, unprecedented in Canada and is in addition to other compensation for the year for a total package of $17 million in 2012," the letter said.

Barrick has since said that it’s working to strengthen its governance practices, looking to add new independent directors and make improvements to its pay practices.

Through Dundee, Goodman says he has a “large position” in Barrick.

“I believe Barrick is probably the best buy on the board,” he said.

But Goodman is critical of Barrick’s massive cost overruns at its $8.5-billion US Pascua-Lama gold project located on the border of Chile and Argentina. Chile's supreme court and environmental regulator have already frozen construction of the mine due to "significant environmental harm." The suspension is poised to be lifted once a water management system is complete.

Goodman says Barrick’s board should have looked into cost overruns a lot sooner than they did.

“The guy that should have known that best was their chief financial officer, and they made him president,” Goodman said, referring to current president and CEO Jamie Sokalsky.

“I think he should have been the one that was wondering why the costs were running up, and the board didn’t do anything about it,” Goodman said.

Pascua-Lama is one of the world’s largest gold and silver deposits. The mine is expected to produce an average of 800,000-850,000 ounces of gold and 35 million ounces of silver in its first full five years of operation at very low costs.

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