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* Equity offering weakness spurs Munk departure, sources say
* Barrick says trying to address investor concerns
* Filing lays out timeline for Munk departure
By Euan Rocha and Michael Erman
TORONTO/NEW YORK, Nov 8 (Reuters) - Barrick Gold Corp signaled on Friday that founder and Chairman Peter Munkwill likely leave the board at next year's annual meeting, amove that sources say is intended to persuade reluctantinvestors to buy into the miner's $3 billion equity offering.
Sources familiar with the situation say banks underwritingthe deal have struggled to sell as much as a third of the shareson offer. Investors have become increasingly concerned aboutBarrick's governance, especially what many see as the board'slack of independence and Munk's dominant role in the boardroom.
Munk, who turned 86 on Friday, has always driven Barrick'sagenda: he started the company in 1983 and forged it into theworld's largest bullion producer. Along the way, he has built areputation as a visionary in the mining industry.
Recent missteps, however, include a disappointing bet oncopper, ballooning costs at its Pascua-Lama project in the Andesand a huge signing bonus for his heir apparent. These haveprompted some investors to question his leadership.
In an amended regulatory filing relating to the equityoffering - one of the largest in Canadian history -Toronto-based Barrick said it is working to address shareholderconcerns. It indicated that Munk is likely to bow out by thetime of the annual meeting, which is likely to take place inApril.
"The board is addressing the issues that have been raisedwith our directors, which include modification of the company'sexecutive compensation arrangements, the rejuvenation of theboard through a combination of departures from the board, theaddition of independent directors and succession in the chairmanrole at the company, consistent with Mr. Munk's desire to retireas chairman of the board," the filing said.
Barrick said it intends to update the market before year-endon those initiatives as well as governance changes expected totake effect in conjunction with the annual meeting.
Barrick has hinted in the past that Munk was likely to leavesoon, but the company had been vague about the timing. OnFriday, it said the filing was meant to clear up confusion inthe market around the timeline for Munk's departure, even thoughit stopped short of specifying an exact date.
Sources familiar with the situation have also told Reutersthat Barrick is likely to formally announce changes to theboard, including Munk's departure, around the end of the year.Those changes are likely to take effect after next year'smeeting.
TOUGH SELL
According the several sources familiar with the deal, the $3billion offer - being run by Royal Bank of Canada,Barclays Plc and GMP - is proving to be a tough sell withinvestors as about $1 billion worth of equity is still unsold.
The company, which has amassed a massive debt load of over$14 billion, is using proceeds from the offering to pay downsome of its debt in the face of declines in the price of gold.
Barrick's New York-listed shares have traded well below theoffer price of $18.35 through much of this week. With the highlyliquid stock available at better prices on the open market, manyhave had little reason to buy shares at the offer price.
Barrick shares, which have fallen 46 percent in the last 12months, closed up less than 1 percent at C$19.07 on the TorontoStock Exchange on Friday.
Long-term investors such as pension funds that arevalue-focused are attracted to the offering given the stock'sdecline, according to one source, but some of these investorsare the ones that have had the biggest reservations around thecorporate governance issues within the company.
A source at a large Canadian pension fund declined to saywhether the fund would buy into the offering now that Munk hassignaled a timetable on his departure. But the source said thataddressing corporate governance issues would go a long waytoward improving the value of the company in the long term.
Barrick's board opted to go with this financing deal at thelast minute, according to several sources, choosing it over aplan put forward by its traditional lenders, including Bank ofNova Scotia, CIBC, JPMorgan, MorganStanley and Bank of Montreal.
Two sources familiar with the matter said the financing dealwas brokered by Barclays Canada Chair Michael Wilson, a formerCanadian minister of finance under then-Prime minister BrianMulroney, who now sits on Barrick's board.
RBC declined to comment on the deal. GMP and Barclays couldnot immediately be reached for comment.
The Wall Street Journal, citing unnamed sources, said onFriday that Mulroney and Howard Beck - both long-time directorson Barrick's board - also indicated they may step down from theboard. Neither of them could be reached for comment.
SHAREHOLDER REVOLT
Barrick faced a minor shareholder revolt at this year'sannual meeting, with around 85 percent of its shareholdersopposing its nonbinding resolution on executive compensation.
The revolt began after a group of Canada's top pension fundspublicly opposed a $11.9 million signing bonus for Co-ChairmanJohn Thornton, the man tipped as the miner's next chairman.
Proxy advisory firm Glass Lewis, earlier this year, advisedits clients to withhold votes from three directors, as the boarddoes not have a two-thirds level of independence.
The generous bonus for Thornton was a particular focus ofinvestor discontent, given problems that have plagued Barrickfor months, including ballooning capital costs at Pascua-Lama, amine it was building on the border of Chile and Argentina.
Last month, Barrick said it would stop development ofPascua-Lama indefinitely, a surprise reversal on a project thathas already cost it more than $5 billion.
Investors have also taken umbrage with Barrick'sdisappointing push into copper through its C$7.3 billion ($7billion) takeover of Africa-focused Equinox in 2011. Sourcesfamiliar with the matter have told Reuters that Munk himselfplayed a pivotal role in pushing for the deal.
