Peter Munk’s extraordinary career of booms and busts – by Rachelle Younglai and Brent Jang (Globe and Mail – November 9, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

TORONTO and VANCOUVER — Peter Munk, a refugee from Hungary who built Canadian businesses in real estate, oil and electronics, is getting ready to bid farewell to the company he transformed into the world’s largest gold producer.

The fedora-sporting tycoon, who turned 86 on Friday, is about to leave Barrick Gold Corp. The industry behemoth he started with a small stake in a Northern Ontario mine is now struggling to regain investor confidence following two years of declines in prices for the precious metal.

Booms and busts have defined Mr. Munk’s life. He was born into a wealthy banking family in Budapest, but the Nazi occupation of his homeland during the Second World War forced them to flee. The Munks used most of the family fortune, held in cash and gold, to board a train in 1944 to Switzerland. About four years later, Mr. Munk left England for Toronto, where he lived with his aunt and uncle.

In Toronto, he helped found sound electronics maker Clairtone Sound Corp., whose high-fidelity products were promoted by the likes of Hugh Hefner and Frank Sinatra. Then Mr. Munk founded Southern Pacific Hotel Corp, a successful hotel and resort venture in Australia, New Zealand, Fiji and Tahiti.

Toronto-based Barrick’s roots date back to when he formed a partnership with mining engineer Robert Smith in 1984. The two men went on to discover and develop the fabled Goldstrike mine in Nevada.

With Mr. Smith’s mining know-how and Mr. Munk’s financial expertise, they formed a close bond. As Barrick’s president, Mr. Smith saw the gold mine’s potential in 1988, when he declared: “Goldstrike is the future of this company.”

The success at Goldstrike gave Barrick the resources in 1994 to acquire Toronto-based Lac Minerals Ltd. for $2.3-billion. The deal gave the two mining executives the opportunity to nurture Lac’s gold assets in South America, including the costly Pascua Lama gold project (which it recently shelved).

Mr. Smith’s sudden death in 1998 from adult respiratory distress syndrome shook Mr. Munk. “This has been a horrendous shock to me, the company, the family and those close to Bob,” Mr. Munk said at the time.

Generous with his wealth, Mr. Munk has poured millions of dollars into Toronto, establishing a cardiac centre as part of the city’s University Health Network.

For the rest of this article, click here:

Comments are closed.