Archive | Barrick Gold Corporation

Foreigners are taking control of Barrick and Goldcorp – but the miners made this mess – by Tim Kiladze (Globe and Mail – January 18, 2019)

David Garofalo seemed to have everything going for him. A polished executive with a strong résumé in mining, he was hired to run Goldcorp Inc. in 2015, giving him control of what looked like a darling in a moribund sector.

Unlike many of its peers, Goldcorp came out of the commodity crash with a favourable view from investors. It had avoided mega-acquisitions. The balance sheet looked good.

Three years later, Mr. Garofalo has lost the confidence of shareholders. Goldcorp’s stock fell by more than half, hit by falling production and rising costs, prompting U.S. gold giant Newmont Mining Corp. to step forward this week with a deal to buy the company for US$10-billion. It’s not certain if Mr. Garofalo will have a job at the merged company. What is clear is that another big Canadian-based mining company is falling into foreign hands. Continue Reading →

Monster Gold-Mining Deals Pile Pressure on Those Left Behind – by Thomas Biesheuvel and Danielle Bochove (Bloomberg News – January 15, 2019)

Mark Bristow’s tenure as boss of the world’s biggest gold miner might have been short-lived, but his message for smaller rivals just got even more pointed.

“Holy camoly, I missed out on a great opportunity!” is how Bristow described anyone not involved in Barrick Gold Corp.’s purchase of Randgold Resources Ltd. in September. With Newmont Mining Corp. poised to become the No. 1 producer through a $10 billion takeover of Goldcorp Inc. announced Monday, the pressure on those left behind will be even greater.

The two mega deals promise to transform the industry that many investors have shunned due to floundering bullion prices and poor decision making by producers. The newly combined companies are also expected to put several unloved assets up for sale, leaving lots of room for maneuvering by those that missed out on the dealmaking so far. Continue Reading →

OPINION: Another one bites the dust: Goldcorp sale a further example of the hollowing-out of corporate Canada – by Eric Reguly (Globe and Mail – January 14, 2019)

Toronto’s Barrick Gold always wanted to team up with Newmont Mining of Colorado. Merging the two giants, which have adjoining operations in gold-rich Nevada, would have created an unassailable industry leader and reduced costs by an estimated US$1-billion a year. On paper, it looked like a dream deal. But it never got off the ground, in good part because Barrick founder Peter Munk wanted the new company to stay in Toronto, not move to Denver.

Were he alive today, Mr. Munk – a Canadian patriot who believed in the value of head offices – would be distraught. In the autumn, Barrick bought Randgold Resources but handed management control to Randgold’s executives, who promptly gutted Barrick’s Toronto headquarters, leaving the world’s top producer with a mere 65 employees in its echo-chamber offices on Bay Street. The deal was, in effect, a reverse takeover. The new Barrick will be run from the Channel Islands.

On Monday, it was Newmont’s turn to accelerate what appears to be the second wave of the great hollowing-out story, a decade after Inco, Falconbridge, Alcan, Dofasco, Stelco and dozens of other industrial powerhouses were eradicated from the Canadian map. Continue Reading →

Barrick CEO to Forge Ahead in Latin America Despite Past Strains – by Danielle Bochove and Laura Millan Lombrana (Bloomberg News – January 10, 2019)

Barrick Gold Corp.’s new boss intends to push ahead with plans to increase investment in the mineral-rich — but environmentally tricky — deposits straddling the Chile-Argentina border.

“If you want to find elephants, go to elephant country,” Chief Executive Officer Mark Bristow, a South African geologist and big-game hunter, said in a phone interview. The Toronto-based company “absolutely” intends to invest more money in the El Indio copper-and gold belt, he said, adding that its partnerships with Chinese and Chilean miners remain key to its strategy in the region.

The world’s largest gold miner, which completed its merger with Randgold Resources Ltd. at the beginning of the year, had been revamping its South American strategy since John Thornton became chairman in 2014. Continue Reading →

OPINION: What happens when Canadian companies stop flying the flag – by Matthew Bellamy (Globe and Mail – January 12, 2019)

Matthew J. Bellamy is an associate professor of history at Carleton University in Ottawa and the author of Profiting the Crown: Canada’s Polymer Corporation.

When General Motors announced in late November that it would be closing its plant in Oshawa, Ont., the outrage was immediate – and perfectly understandable. Here was a strategic move on the part of a multinational company, tearing out roots and slashing the manufacturing jobs that were the lifeblood of the town. Add in the billions of dollars that Ottawa had spent to keep the company in Canada, and it’s easy to see why Canadians would take this so personally.

Meanwhile, the recent news about Barrick Gold – that it would lay off more than half of the staff at its Toronto head office in the wake of a merger with Randgold, an African operator headquartered in the Channel Islands, and revamp its board of directors to leave just one Canadian-born member who lives in New York – hasn’t stirred the emotions in quite the same way.

Fair enough, too: Much of Barrick’s business, since it transitioned from a money-losing oil and gas firm to a money-spinning mining company, has happened outside of Canada, in places such as the United States, Australia, the Dominican Republic, Peru, Argentina and Chile. And even though the company’s dynamic founder, Peter Munk, lived in Canada for seven decades, he passed away in March. Continue Reading →

Brian K. G. Meikle (1932 – 2016) – 2019 Canadian Mining Hall of Fame Inductee

The Canadian Mining Hall of Fame was conceived by the late Maurice R. Brown, former editor and publisher of The Northern Miner, as a way to recognize and honour the legendary mine finders and builders of a great Canadian industry. The Hall was established in 1988. For more information about the extraordinary individuals who have been inducted into the Hall of Fame, please go to their home website:

The greatest discoveries are transformative, and Brian Meikle is one of only a few modern-era geologists who achieved this pinnacle of success. In the 1960s, he contributed to the discovery and development of the Camflo gold mine in Quebec, and later was part of a talented team that made it a cornerstone of growth for Barrick Gold (formerly American Barrick). In the early 1980s, he recognized the potential of the Mercur gold mine in Utah, which became a key link in the evolution of Barrick.

Meikle’s crowning achievement was the 1986 Goldstrike discovery in Nevada, which grew to approximately 60 million ounces of gold reserves and resources in several deposits. Goldstrike propelled Barrick into the world’s largest gold miner and generated immense wealth that has flowed back to benefit Canadian companies, shareholders and society.

Born in Montreal, Meikle returned to Canada from California as a post-graduate student. He earned an MSc degree (geology) from McGill University in 1955, followed by his PhD in 1959. He was the recipient of McGill’s Logan Gold Medal in 1958, awarded to the graduating student who stands highest in the First Class Honours list in Geology. This video was produced by PENDA Productions, a full service production company specializing in Corporate Communications with a focus on Corporate Responsibility.

In 1962, Meikle joined Camflo Mines and was instrumental in discoveries that made the mine and the company. He spent 22 years with Camfl o in diverse roles, including mine manager and vicepresident of operations. In 1984, Peter Munk acquired Camflo for American Barrick and also gained a dream technical team to help realize his dream of creating a major gold producer. Continue Reading →

Barrick Gold’s new CEO dismisses debate over whether company will remain Canadian as ‘hysteria’ – by Danielle Bochove (Financial Post/Bloomberg – January 10, 2019)

Barrick Gold Corp.’s new chief executive is surprised by the “hysteria” over whether the world’s largest gold miner will remain a Canadian company.

Barely a week after his Channel Islands-based Randgold Resources Ltd. merged with Barrick, Mark Bristow says he’s determined to keep the global miner headquartered in Toronto — or at least as committed as he is to any head office.

“Mining industries have to catch up with the reality of the times,” Bristow said in a phone interview from Jackson Hole, Wyoming, where he maintains a home. “We can’t sit in this massive corporate office — this old tradition — trying to run an organization that’s global by remote control.” Continue Reading →

Making the case for investing in Barrick Gold – by David Berman (Globe and Mail – January 9, 2019)

Now that Barrick Gold Corp. has completed its merger with Randgold Resources Ltd., investors will need to see evidence that the combined company can navigate a thorny issue: Does Barrick’s shift toward African-based mines raise the geopolitical risks for a company that used to be defined by its stable locales?

The deal between Barrick and Randgold, announced last September and finalized on Jan. 1, comes amid a much-needed jolt for the gold sector.

Gold producers had fallen out of favour in recent years, as the price of gold declined 32 per cent since 2011 amid paltry new discoveries and rising production costs. And with interest rates on the rise in the United States over the past two years, gold’s attractiveness as a haven next to yield-bearing fixed income investments, including ultrasafe U.S. Treasury bonds, had been sidelined. Continue Reading →

Barrick Gold eyeing Canada for acquisition opportunities – by Niall McGee (Globe and Mail – January 8, 2019)

Barrick Gold Corp.’s new chief executive says the company is sizing up a number of acquisition opportunities in Canada as it looks to boost investment in its home country.

“If you look at the corporate structure, the biggest gap is the fact that it’s under invested in Canada,” Barrick chief executive officer Mark Bristow said in an interview late last week.

Barrick last week completed its US$6-billion acquisition of rival gold miner Randgold Resources, and Mr. Bristow, Randgold’s founder, formally took over as Barrick’s CEO after being named in September to take the post. Amid Mr. Bristow’s pending leadership, Barrick made steep cuts to staff at its Toronto head office and a revamp of the board has left just one Canadian director. Continue Reading →

What lessons does Barrick Gold’s fate really teach us? – by Robert Yalden (Globe and Mail – January 7, 2018)

Robert Yalden is the Stephen Sigurdson Professor in Corporate Law and Finance at Queen’s University and previously a senior partner at Osler, Hoskin & Harcourt LLP, where he served as co-chair of its M&A Group.

The year 2019 has barely begun, yet some have already started wringing their hands in public about the fate of corporate Canada. This time, the focus is a set of changes that are unfolding at Barrick Gold Corporation, a Canadian company that the legendary Peter Munk built into one of the world’s largest gold-mining businesses.

The changes include Barrick’s decision to acquire Randgold Resources Ltd., announced in September, 2018, and completed on Jan. 1, 2019, after receiving shareholder and regulatory approvals. The transaction forms part of Barrick’s plan to refocus its business and implement other related initiatives that have now suddenly caught people’s attention: revamping Barrick’s board of directors, so that instead of having several resident Canadian directors, it will have only one with Canadian roots; and reducing the number of positions in Barrick’s Toronto head office from the 150 or so that were there in September to approximately 65 to 70.

Pierre Lassonde, chair of the board of Franco-Nevada Corp., was quoted in The Globe and Mail on Jan. 4 as saying that he thought Mr. Munk, Barrick’s founder, “is going to roll over in his grave 10 times.” Continue Reading →

The gutting of Barrick Gold – it didn’t have to be this way – by Eric Reguly (Globe and Mail – January 5, 2019)

Before I moved to Europe in 2007, I spent almost a decade in Toronto writing about the eradication of Corporate Canada. Most big companies I followed – Inco, Falconbridge, Alcan, Dofasco, Molson, Fairmont, Four Seasons, among others – were flogged to foreigners, their head offices downgraded to branch plants or eliminated.

Were it not for ownership restrictions, the banks also would have surrendered to the cult of shareholder value – take the premium and hit the links. Canadians were sellers, not builders. If there was one company that was safe from the takeover onslaught, it was Barrick Gold, I thought. I was both right and wrong, but more wrong.

At the time, Barrick was run by its founder, Peter Munk, the Hungarian-born Canadian patriot who wanted to build the world’s biggest gold miner. After achieving that goal, he mused about creating a diversified resources giant, the equivalent of a BHP Billiton or Rio Tinto under the Maple Leaf. Continue Reading →

Barrick Gold veering away from Canadian roots after Randgold acquisition – by Niall McGee and Rachelle Younglai (Globe and Mail – January 4, 2019)

The slow shift of power away from Barrick Gold Corp.’s Canadian head office has moved into high gear, just days after it closed its deal with African operator Randgold Resources Ltd.

The US$6-billion acquisition, which was announced in September and completed Tuesday, has left Barrick with a hollowed-out head office, almost no Canadian representation on the board and few Canadians in top management positions.

Barrick’s retreat in Canada reflects a broader downsizing of Toronto as a world mining capital, with fewer global players headquartered in the city and dramatically less mining capital being raised on the Toronto Stock Exchange. Barrick, the world’s largest gold producer, had been one of the last great Canadian corporate mining champions left standing after a wave of foreign takeovers of metals giants such as Inco and Falconbridge. Continue Reading →

Barrick’s New CEO Says Gold Industry Shake-Up Is Just Starting – by Thomas Biesheuvel (Bloomberg News – January 2, 2019)

Barrick Gold Corp.’s new chief executive officer has a message for the gold industry: This is just the start of a big shake-up.

Barrick agreed to buy smaller rival Randgold Resources Ltd. in a $5.4 billion deal announced in September. As part of the agreement, Randgold’s CEO, Mark Bristow, became the chief executive of Barrick, the world’s biggest gold miner.

“Without a doubt, this industry needs transformation,” Bristow said in an interview from New York, where the combined company started trading Wednesday. “We believe we have started that. We’re going to end up with a blue-chip business and on the way we’re not going to be sitting on our hands should there be other opportunities.” Continue Reading →

Barrick’s new CEO defends head-office job cuts as Randgold acquisition closes – by Niall McGee (Globe and Mail – January 3, 2019)

Barrick Gold Corp.’s new chief executive officer defended the company’s decision to lay off more than half of the staff at its Toronto head office before Christmas, saying it was a necessary move in a difficult market.

Barrick issued layoff notices to about 95 people at its headquarters in December, bringing its headcount down to about 65 people, The Globe and Mail reported on Dec. 21. In an interview, CEO Mark Bristow said there are no plans to shut the office entirely, adding that a continuing staff is needed to carry out treasury services, human resources and accounting.

In another sign of Barrick’s diminished presence in the country, the gold miner announced a revamped board of directors on which only one of nine members is Canadian. Leaving the board are Anthony Munk, son of Barrick founder Peter Munk; Toronto-based mining consultant Graham Clow; and Robert Prichard, who is chair of Bank of Montreal. Continue Reading →

Barrick’s no-premium Randgold deal expected to spur more mining M&A in 2019 – by Niall McGee (Globe and Mail – January 1, 2019)

Junior mining companies struggled once again to raise capital in 2018 with
the lowest level of equity issuance in the North American metals and mining
sector in 13 years. To fill the void, many have turned to more expensive
methods of raising capital, including royalty agreements and streaming deals.

Barrick Gold Corp.’s “no-premium” US$6-billion acquisition of Randgold Resources Ltd. is expected to trigger more deal making in the struggling Canadian gold sector in 2019.

During the great commodities boom of the mid-2000s, Barrick and others unveiled splashy multibillion-dollar-premium takeovers only eventually to take massive writedowns. But in September, Barrick broke away from the old model by announcing it will pay merely the market price for Randgold. The deal was warmly greeted by shareholders on both sides as a sensible solution in a difficult market.

“M&A has slowly been re-entering investor consciousness, and we suspect this trend will gain momentum in 2019, especially since there have now been a few successful transactions,” BMO Nesbitt Burns Inc. analyst Andrew Kaip wrote in a note to clients, including the Barrick-Randgold deal as an example. Continue Reading →