Lisa Wright is a business reporter with the Toronto Star, which has the largest circulation in Canada. The paper has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion. This article was originally published February 18, 2011.
Chalk it up to the luck of the Irish but Aaron Regent has already marked a number of golden milestones this year, both personal and professional.
For starters, he just passed the two-year mark as chief executive of the world’s largest bullion producer, Barrick Gold Corp., amid a red-hot gold market.
He also turned 45 last month. And recently it was revealed the Dublin-born, Calgary-bred executive is the top-paid CEO in Canada, raking in $24.2 million in 2009.
True to form, Regent remains low-key about it all. “It’s been a busy two years for us,” he says, with an accent that hints of both old country and new.
Regent is a chartered accountant and career executive who studied history. He was previously at Brookfield Asset Management Inc. and ran former nickel miner Falconbridge Ltd. before that.
His management style is a departure from Barrick’s flamboyant founder and chairman Peter Munk.
“He’s not a flashy type of guy,” says John Ing, president of investment dealer Maison Placements Canada Inc. in Toronto. “He’s very deliberate.”
Regent’s laid-back manner reflects that of the firm he runs, which observers say is renowned for “under-promoting” itself.
Barrick’s announcement Thursday of record fourth-quarter profits that beat the street yet again is considered a reflection of both the strong gold price and several moves Regent has made to take the company forward as miners struggle to find more of the precious metal amid dwindling global supply.
He began by eliminating Barrick’s highly unpopular hedge book, which for years saw the company forward-selling its gold to lock in prices. The strategy was smart and lucrative in the ‘90s bear market but cast a pall over the firm while bullion took off in the last decade.
Regent then cut 80 executives, a move Ing says “got rid of some of the old guard and lowered the body count” at head office while pushing more accountability down to the mine level in the five continents in which it operates.
Regent also spun off Barrick’s high-cost African assets into a separate company that trades on the London Stock Exchange. African Barrick Gold reported Wednesday it had more than doubled pre-tax annual profits on the back of soaring gold prices and robust sales.
“Over the past year, what I’ve really been pleased with is to see the outcome of (all) that,” he says.
Despite mostly favourable reviews of his performance, Regent still has the monkey on his back that plagued his predecessors: Barrick’s lacklustre share price.
The gold price surged 25 per cent last year – its 10th straight annual gain – but Barrick stock is only back to where it was before the big market downturn in 2008. “There’s been a bit of a lag,” he says.
But he argues Barrick’s stock price outperformed gold on its climb back up from the market crash, rising 33 per cent last year.
Meanwhile, the gold price has slipped a bit this year in a correction widely predicted after it reached a record $1,432.50 U.S. an ounce last December. It closed at $1,384.70, up $10, Thursday in New York.
The other question is whether the gold mining behemoth is on the prowl for a takeover considering the rising price environment and the scarcity of the yellow metal.
“Our focus is not exclusively on acquisitions,” says Regent. “If we do something, you shouldn’t be surprised. But we don’t have to chase anything. … Our bias right now is building on our pipeline.”
For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/business/article/943496–the-mining-giant-s-golden-boy