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Barrick Gold Corporation

[Barrick and Randgold] Merger says ‘two very positive things about the sector’: Garofalo – by Richard Roberts (Mining Journal – September 26, 2018)

https://www.mining-journal.com/

“Strange”, said one veteran company boss, because the sound “cultural fit” trumpeted by the proponents did not quite seem to gel with past comments by Randgold CEO Mark Bristow in particular, and because Barrick once seemed to be shifting its future focus away from Africa.

A “positive” for the sector because, as several industry leaders and observers noted over the past week, at both the Denver Gold Forum and the preceding Beaver Creek Precious Metals Summit, gold equities other than the likes of sector numero uno Newmont Mining had all but disappeared from major market indices due to declining worth and hence relevance.

The Barrick-Randgold merger to create an $18 billion company, officially announced at the start of this week, initially generated some of the positive investor focus on the sector many hope will come from such large-scale transactions going forward. The share prices of Newmont, Goldcorp, Agnico Eagle and Barrick itself reacted positively to the news – albeit nearly all the big North American-listed gold equities have seen their prices deteriorate (some handsomely) since July.

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With Randgold deal, Barrick looks to trim the rest of its fat – by Niall McGee (Globe and Mail – September 26, 2018)

https://www.theglobeandmail.com/

It’s a US$6-billion gold mining deal with seemingly no synergies. Usually when a large takeover is unveiled, the acquirer will try to sell the deal to its shareholder base by talking up “synergies” – management speak for cost-cutting.

But such talk was absent from both the regulatory documents released with the announcement and presentations of both Barrick Gold Corp. and Randgold Resources Ltd. during two separate, hour-long conference calls on Monday.

So where’s the fat with the Barrick takeover of Randgold, a combination one analyst dubbed “Brandgold?” Part of the answer is there’s not that much fat to trim.

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Barrick-Randgold deal could be a wake-up call for investors – by Ian McGugan (Globe and Mail – September 26, 2018)

https://www.theglobeandmail.com/

Like any epic tale, the big deal between Barrick Gold Corp. and Randgold Resources Ltd. can be read in at least a couple of ways.

The cynical view is to see it as a desperation strategy. If you can’t do much to upgrade the appeal of your key commodity (and gold miners can’t) and if your recent share price performance has been brutal (and it has), then there’s nothing like a flurry of corporate re-engineering to keep investors intrigued.

But a more positive take is to view the grand alliance as the beginning of a new round of merger and acquisition activity in the sector. That’s the view of IKN, the widely read mining industry newsletter that was first to break news of the tie-up.

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Barrick doubles down on risky African mining sector in $6-billion acquisition of Randgold – by Niall McGee and Rachelle Younglai (Globe and Mail – September 25, 2018)

https://www.theglobeandmail.com/

Barrick Gold Corp. has agreed to acquire rival gold miner Randgold Resources Ltd. for roughly US$6-billion in an all-stock deal that some investors said runs counter to the Canadian gold producer’s conservative strategy and adds political risk by sharply increasing its exposure to Africa.

The combination of Barrick, one of the worst performing senior gold companies of the past decade, with Randgold, one of the best operators, was announced early on Monday, after The Globe and Mail reported on the weekend that a deal was imminent. Barrick, founded in 1983 by the late Peter Munk, was once worth in excess of $54-billion but its value plummeted after the price of gold bullion went into a tailspin in late 2011 and in the aftermath of a number of corporate blunders.

As executives at both companies extolled the virtues of the deal to investors on Monday, investors and analysts also raised concerns about Toronto-based Barrick doubling down in the very region in which it has struggled the most in recent years.

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Randgold CEO Mark Bristow a seemingly odd fit as new Barrick Gold chief – by Geoffrey York (Globe and Mail – September 25, 2018)

https://www.theglobeandmail.com/

Barrick Gold Corp.’s proposed new chief executive officer, Mark Bristow, is a larger-than-life character: a former conscript soldier in South Africa’s apartheid army whose hobby is riding motorcycles across the most dangerous and remote corners of the African continent.

Mr. Bristow has a long record of success in some of Africa’s toughest mining regions, but he could be an odd fit in Barrick’s buttoned-down corporate environment. He is notoriously outspoken, often making blunt pronouncements on the perceived errors of investors, politicians and other mining companies.

The 59-year-old miner has manoeuvred shrewdly through Africa’s challenges, building his Randgold Resources Ltd. into a multibillion-dollar empire with major projects in Mali, Ivory Coast and the Democratic Republic of the Congo.

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Barrick’s hiring of Mark Bristow sets up potential clash of strategic visions – by Eric Reguly (Globe and Mail – September 25, 2018)

https://www.theglobeandmail.com/

Barrick Gold Corp. executive chairman John Thornton has been a great admirer of Randgold Resources Ltd. CEO Mark Bristow and has circled him for years. On Monday, the bromance triggered Barrick’s US$6-billion takeover of Randgold.

It was an effective – though expensive – way for Mr. Thornton to fill the vacant chief executive position at Barrick; Mr. Bristow is to become the head of the enlarged company. Now we know why Mr. Thornton was tempted to leave that position open for four years. As far as he was concerned, there was only one candidate for the job, and that candidate was Mr. Bristow.

It’s a safe bet to assume that both men see eye to eye on many levels. If they had not, the deal to create a gold-mining colossus with a market value of more than US$18-billion surely would have fizzled.

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Barrick bets on Africa with $6-billion Randgold merger – by Gabriel Friedman (Financial Post – September 25, 2018)

https://business.financialpost.com/

But Randgold the company faces a wave of potential disruptions

In a move that would allow Barrick Gold Corp. to regain its crown as the world’s largest gold producer and tie the company’s future more closely to Africa, the Toronto-based miner on Monday announced a US$6 billion plan to purchase Randgold Resources Ltd.

If the all-share, no-premium deal closes as expected in 2019, Barrick shareholders would control two-thirds of the company while Randgold would control the rest.

In a conference call on Monday afternoon, John Thornton, executive chairman of Barrick Gold Corp. said Randgold has a track record of success in the “most challenging environments in the world,” namely Africa, where Barrick’s subsidiary Acacia Mining Inc. has been struggling through a years-long tax dispute with the Tanzanian government.

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Barrick Silences Its Biggest Critic by Buying Out Randgold – by Thomas Biesheuvel (Bloomberg News – September 24, 2018)

https://www.bloomberg.com/

For more than two decades, Mark Bristow has been a thorn in the side of Barrick Gold Corp. Now he’s its closest partner.

The 59-year-old South African will take the role of chief executive officer at Barrick after the Canadian company inked a $5.4 billion deal to buy out Randgold Resources Ltd. It’s a bigger stage for Bristow, known as an outsider for his sharp and frequent criticisms of the gold industry and a genius at running an African mine.

Bristow’s personality looms large. He’s fond of cigars and big-game hunts, as well as motocross expeditions across Africa. He’s been known to use his pilot license to fly investors directly to African mines via his private plane, and run Randgold from top to bottom, often personally handling its investor and media communications.

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Barrick Needs Randgold to Make the Grade – by David Fickling (Bloomberg News – September 24, 2018)

https://www.bloomberg.com/

Few gold miners can operate profitably near the metal’s current grade levels. A merger may be the best solution.

Gold miners have been struggling for decades against geological destiny.

The grade of metal in the world’s gold reserves has been declining for years, from average levels above 10 grams a metric ton in the late 1960s to almost one tenth of that now. That’s a worrying metric, because few gold mines can operate profitably below 1 gram a ton – equivalent to extracting two teaspoons of gold from a Statue of Liberty’s-worth of ore.

With gold prices now hovering below $1,200 a troy ounce, that deterioration of the world’s ore quality is becoming particularly acute. From levels of 1.42 grams a ton a decade ago, the average reserve grade of the top five gold miners – Barrick Gold Corp., Newmont Mining Corp., Anglogold Ashanti Holdings Plc, Goldcorp Inc., and Newcrest Mining Ltd. – has fallen to 1.12 grams in 2017, having touched a low of 1.04 five years earlier.

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Barrick Gold agrees to buy rival Randgold in all-stock deal – by Danielle Bochove, Dinesh Nair, Scott Deveau and David Stringer (BNN/Bloomberg News – September 24, 2018)

https://www.bnnbloomberg.ca/

Barrick Gold Corp. agreed to buy Randgold Resources Ltd. in a deal valuing the combined company at US$18 billion, creating a gold mining behemoth with a focus on Africa.

The all-share transaction values Randgold at US$5.4 billion, making it the biggest gold mining deal of the past three years. The deal will help Barrick boost output at a time when its stock has been punished for a stagnant pipeline. The company’s shares have about halved from a February 2017 peak.

“Randgold has a proven ability to operate successfully in some of the most challenging environments in the world,” Barrick Executive Chairman John Thornton said on a conference call. “The combined company will have five of the world’s top 10 tier-one gold assets.”

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Barrick swallows Randgold in $18.3-billion deal to create gold mining giant – by Eric Reguly and Niall McGee (Globe and Mail – September 24, 2018)

https://www.theglobeandmail.com/

Canada’s Barrick Gold is swallowing African operator Randgold Resources in a takeover worth roughly US$6-billion that will ensure its status as the world’s biggest gold company, and bring in a chief executive officer for the first time since 2014.

The all-share, no premium deal, which will value the combined company at US$18.3-billion, seems designed to overcome Barrick’s problems in Africa, where it controls mines through its 64-per-cent ownership of Acacia (formerly African Barrick), and perceived weakness among its senior management ranks. Barrick has no CEO and lost its president, Kelvin Dushnisky, last month.

The deal marks the first big expansion move by Barrick executive chairman John Thornton after four years of shrinking the company through mine sales, mine closures and the recruitment of Chinese partners at some of its operations.

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Canada’s Barrick Gold to buy Randgold Resources in $18.3 billion deal – by Zandi Shabalala, Justin George Varghese and Clara Denina (Reuters U.S. – September 24, 2018)

https://www.reuters.com/

LONDON (Reuters) – Canada’s Barrick Gold (ABX.TO) has agreed to buy Randgold Resources Ltd (RRS.L) in a $18.3 billion share deal to create the world’s largest gold company by value and output in an industry under investor pressure to put capital to good use.

The new Barrick company, which will be listed in New York and Toronto, will own five of the world’s 10 lowest cost gold mines and will be valued at $24 billion including debt.

The deal marks the biggest transaction in years in the gold mining industry, where companies have come under fire from investors for poorly managing capital, forcing them to focus on costs while dampening enthusiasm for acquisitions.

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Barrick and Randgold in talks on $18bn tie-up – by Henry Sanderson and Neil Hume (Financial Times – September 23, 2018)

https://www.ft.com/

Merger would create leading gold producer as sector struggles to attract investors

Canada’s Barrick Gold is in talks to merge with Randgold Resources, its London-listed rival, in a $18bn deal that would create the world’s leading gold producer, according to reports.

The discussions between Barrick and Randgold follow a dismal year for the sector, which has struggled to attract the interest of investors.

Shares in Barrick have dropped 25 per cent amid criticism of its strategy, while Randgold has fallen 34 per cent as it has struggled with a number of operational issues, including a strike at one of its biggest mines.

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Barrick Gold Seeks Chinese Partners, May Slash Headcount: Globe – by Natalie Obiko Pearson (Bloomberg News – September 15, 2018)

https://www.bloomberg.com/

Barrick Gold Corp. may slash 400 jobs and involve Chinese partners in its troubled Tanzania operations, Executive Chairman John Thornton told the Globe and Mail newspaper.

The Toronto-based company has slashed middle management by half to about 700 and “we want to get it down to 300,” Thornton, who’s been in his role since 2014, told the Globe in an interview in London. The former Goldman Sachs Group Inc. executive wants a leaner, entrepreneurial partnership more like the early days under late founder Peter Munk, the Globe said.

Thornton said there’s “an almost 100 percent” chance Chinese partners will get involved in Barrick’s projects in Tanzania that are operated through its 64 percent stake in Acacia Mining Plc.

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Barrick Gold’s John Thornton won’t back down – by Eric Reguly (Globe and Mail – September 15, 2018)

https://www.theglobeandmail.com/

John Thornton will tell you he saved Barrick Gold Corp. from certain destruction and set it up for fresh success. The company’s shareholders are not convinced. To many of them, Barrick looks like the incredible shrinking company. Who is right?

Mr. Thornton, executive chairman of the world’s biggest gold company since 2014, and a former Goldman Sachs Group Inc. president, is utterly convinced his overhaul of Barrick has changed the Toronto company for the better – even though its shares have dropped almost 40 per cent in the past year alone and are down by more than half since their most recent peak, in 2016.

In an exceedingly rare interview – this is one boss who avoids the media – he is coming out of his shell to defend a turnaround strategy that seems to have alienated investors rather than please them. “Chasing ounces,” as he puts it, is not his strategy. His plan is to recreate Barrick as a gold company that does not operate like a gold company, while inviting big-name Chinese miners to invest in Barrick projects.

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