Barrick Gold Chairman’s Shakeup Keeps Investors Guessing – by Liezel Hill (Bloomberg News – February 17, 2015)

http://www.bloomberg.com/

(Bloomberg) — On an icy late-January evening in Toronto, more than 30 Barrick Gold Corp. mine managers and country heads gathered in the basement of a pub to hear their executive chairman’s vision for the world’s largest gold producer.

In town for year-end meetings, the group listened intently as John Thornton outlined a plan to give them the authority they needed to run their units like their own businesses, according to a person present. Barrick’s Toronto headquarters would shrink in size and reach.

To outsiders these are eye-opening words, coming from a leader known within Barrick for a detail-oriented style which has placed him at the center of decision-making at different levels of the company.

While his comments suggest he’s trying to return Barrick to its nimble roots, questions remain within the investment community about what that may mean over the long run. Will Thornton, an ex-Goldman Sachs Group Inc. banker, keep Barrick focused on gold, or diversify further into other metals such as copper, as he has hinted in the past?

“I have no idea what’s going on,” said David Christensen, chief executive officer of ASA Gold & Precious Metals Ltd, a San Mateo, California-based investor that holds Barrick shares. “I feel like I’m looking into a black hole.”

Barrick is expected to report Wednesday its first annual per-share profit in three years, according to analyst estimates compiled by Bloomberg. To get there, the company has reduced production costs and the number of mines it operates. Still, it remains saddled with $13.1 billion in debt after the acquisition of copper producer Equinox Minerals Ltd. in 2011 under a previous CEO. Since Thornton took over, Barrick shares have plunged 31 percent in New York trading, while the Philadelphia Stock Exchange Gold and Silver Index has fallen 19 percent and gold prices are down 6.6 percent.

‘Empire Building’

“The idea of a big global empire-building gold company basically hasn’t worked,” said Patrick Chidley, a New York-based analyst at HSBC Holdings Plc.

ASA’s Christensen will finally get his chance to hear from the Barrick chairman on Thursday. Thornton, 61, plans to join the company’s earnings conference call for the first time and will discuss Barrick’s strategy, according to a company spokesman.

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