John Thornton, former Goldman Sachs president, threw out the mining rulebook when he took over Barrick Gold Corp.
Mining is famously boom and bust. Money and patience are mandatory. In bad times, companies sell assets and close mines. In booms they buy up all they can.
John Thornton threw that rulebook out when he took over struggling Barrick Gold Corp. ABX -2.18% , the world’s largest gold producer. The former Goldman Sachs Group Inc. president was an industry amateur, as were most of his top hires. He followed Goldman as a model for company compensation. Instead of buying when prices recovered, he cut costs and sold assets.
Mr. Thornton, 64 years old, spends only two or three days a month at Barrick’s Toronto headquarters. He communicates constantly with his team by email, sometimes firing off requests late at night or when executives are on vacation, according to people familiar with the matter. If he doesn’t receive a quick response, Mr. Thornton repeats the request with the new subject line: “resending,” these people said.
At one point, he grew so frustrated about the lack of progress with a messy mining dispute in Tanzania that he intervened to strike a settlement without telling many of the company’s executives and directors.
The former banker’s turnaround plan has succeeded in reining in Barrick’s debt. It has also eroded the company’s gold production and reserves. Investor uncertainty about the miner’s plans has contributed to a 33% share price decline in the past 12 months.
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