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It wouldn’t be in Peter Munk’s nature to go out quietly. But no one expected this.
As Mr. Munk, 86, officially retires at Barrick Gold Corp.’s annual meeting on Wednesday, he does so in the midst of an appalling public feud between Barrick and Newmont Mining Corp., which went from eager merger partners to mortal enemies in a matter of days. It will take years to rebuild the bridges between these companies, if indeed that ever happens.
Mr. Munk was not closely involved in the Newmont negotiations — he left that to his hand-picked successor John Thornton. But he still found a way to stick himself in the middle of the dispute. In a detailed interview with the Financial Post last week, just as talks were collapsing, he ripped Newmont’s corporate culture and said the company is “not shareholder friendly.” Newmont was not amused.
Remarkably, that was one of the less incendiary things Mr. Munk said about his U.S. rival over a lengthy conversation that touched on many aspects of his career. He has always spoken his mind and never worried too much about what people think of it. But as his time in Canadian business comes to a close, he was even more candid, thought-provoking and entertaining than usual.
For example, if Newmont didn’t like the “not shareholder friendly” line, it certainly won’t appreciate his description of how Barrick found its flagship gold mine and became the dominant player in Nevada:
“They [Newmont] were Mr. Nevada and we were this absolute penny stock upstart from Toronto. And we discovered Goldstrike on a property they rejected as not being useful because their geologists were so incompetent and so risk-averse.”
He also offered some harsh words on Newmont’s “bureaucratic” structure and overall mentality, which he believes is far less inspired and committed than Barrick’s.
Of course, Mr. Munk also criticized Barrick where it was deserved. That includes its work at Pascua-Lama, a catastrophic project in the Andes that has gone far over budget, been halted by regulators and is still not close to being built. Mr. Munk called Pascua “a f–k-up of such magnitude that they’ll write books about it.” Indeed, Barrick was coincidentally sued for $6-billion over Pascua a few hours after those words left his mouth.
Given Mr. Munk’s colourful business history and knack for grabbing attention, it seems only appropriate that he should exit in this manner, with all eyes on him and his company.
His career as a Canadian entrepreneur is legendary. After arriving in the country as a penniless Hungarian immigrant at age 18, he co-founded the sound equipment company Clairtone in 1958 and quickly became a sensation. When Clairtone died, he invested in hotel properties in the South Pacific and built another successful business. He then founded Barrick in 1983. In less than 25 years, it blew by its competitors to become the world’s biggest gold producer, largely through acquisitions.
There were plenty of hiccups along the way at Barrick, including a fortunate miss on a potential deal with Bre-X. But remarkably, the last 14 months may have been the most turbulent in the gold miner’s history. Mr. Munk said he received more criticism for giving Mr. Thornton a US$12-million “signing bonus” than at any point since the collapse of Clairtone in 1968.
For the rest of this article, click here: http://business.financialpost.com/2014/04/29/peter-munks-career-comes-to-end-as-newmont-firestorm-envelops-barrick/