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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Barrick Gold Corp    ABX   CA0679011084

BARRICK GOLD CORP

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Barrick Gold : CEO Bets on Nevada Deal

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03/15/2019 | 01:48am EDT

Mark Bristow helped pull off partnership with Newmont; now he has to make it work

By Jacquie McNish, Alexandra Wexler and Alistair MacDonald 

TORONTO -- Six months ago, Mark Bristow was the chief of a midsize African gold miner wrestling with political interference. Today he heads Barrick Gold Corp., the world's largest gold producer which this week struck an agreement to pool its Nevada assets with its nearest rival Newmont Mining Corp.

The two miners had long sought a partnership, but couldn't agree to terms. "What is amazing is that we were able to convince everyone that this was a good idea," Mr. Bristow said of the Nevada partnership.

The 60-year-old South African geologist has been a brash force in the mining industry ever since he turned around a financially-strapped junior miner in the 2000s with a winning bet on the West African country of Mali. He subsequently transformed that company, Randgold Resources Ltd., and its small portfolio of remote African gold mines into one of the industry's most consistently profitable companies.

He has developed mines in some of Africa's most politically volatile countries, sometimes attacking competitors or politicians for strategies that he felt hindered sustainable local prosperity. In 2003, Mr. Bristow launched an unsolicited bid to merge with Ghana's Ashanti Goldfields, which was twice the size of Randgold. The attempt was unsuccessful, but established his reputation as an aggressive deal maker.

Mr. Bristow was named Barrick's chief executive in January after the company merged with the much smaller Randgold last year. He described himself to his new executive team as a "consultative dictator" who planned to dramatically shrink Barrick's Toronto head office. He said he would spend the bulk of his time visiting mines, which he told staff suffered under weak management.

At Barrick, he has sought to paint himself as a rough-hewed miner's miner, in contrast to Executive Chairman John Thornton, an urbane academic and former Goldman Sachs Group Inc. president. "He is an email person, I am a talker," Mr. Bristow said at a recent industry conference in South Africa, describing his relationship with Mr. Thornton.

His exploits have helped build his image as a maverick. At Randgold, Mr. Bristow operated out of an office in the English Channel island of Jersey with seven employees, spending most of his time piloting one of his five personal planes to far-flung mines. He estimates he has competed in more than 200 marathons, kayak races and Ironman triathlons. He climbed Mount Kilimanjaro with one of his two sons, who was 12 at the time, and led both on motorcycle treks across Africa. Once, it took paramedics four days to reach him in Senegal after he was thrown off his motorcycle into a tree and fractured two vertebrae.

As a child, Mr. Bristow says, he was knocked unconscious or broke so many bones during sporting events that his father bought a chair for his mother to sit in by the telephone because there were so many emergency calls.

"I've always put myself out there," Mr. Bristow said. "You have to make a difference."

In the early 2000s, when foreign mining giants shed African assets after Nelson Mandela's rise to power in South Africa stirred labor activism, Mr. Bristow saw an opportunity to buy cheap mining properties in hot spots such as Mali, Ivory Coast and the Democratic Republic of Congo. He staffed Randgold's mines with locally trained managers and ceded minority stakes to governments. "I wanted to prove you didn't need outsiders to develop Africa's mines," he said.

"Running a global miner is his destiny," said Joe Foster, manager of VanEck International Investors Gold Fund, who invested in Randgold after meeting Mr. Bristow in 2002 when he was struggling to raise money to develop the Mali mine.

Overseeing a company the size of Barrick, though, is a new challenge for Mr. Bristow, especially now that it is tilted primarily toward production in Nevada, not Africa. At Randgold, Mr. Bristow oversaw five gold mines in three countries. At Barrick, he now has a portfolio of 19 mines in 15 countries.

On Monday, Barrick abandoned a $18 billion unsolicited offer for Newmont and agreed to a much more limited joint venture of the two firms' Nevada operations. Newmont executives, in defending themselves to investors against the takeover offer, frequently pointed to Mr. Bristow's lack of experience leading a large, globe-spanning company.

The "mystique and awe around Bristow is based around his running five mines in one continent," Tom Palmer, Newmont's chief operating officer, said last week before Newmont signed up for the joint venture.

The two sides now agree they can squeeze hundreds of millions of dollars annually in savings jointly running the Nevada mines. Barrick, which controls more assets there, will be the operator of the venture.

Mr. Bristow said he initiated discussions with foreign competitors in 2015 to diversify away from his homeland. After a series of preliminary talks with rivals, he said Barrick's Mr. Thornton "was the only one who would listen to me."

Last September, Randgold agreed to be acquired by Barrick, which was struggling with a swooning stock price over investor concerns about its shrinking gold production. Even before Barrick and Randgold completed the merger, Mr. Bristow said he was looking for the next big deal. He and Newmont CEO Gary Goldberg exchanged messages about a possible combination of their large Nevada operations, but talks never materialized.

Mr. Bristow was caught off guard when Newmont announced a $10 billion all-share agreement in January to merge with Canadian gold producer Goldcorp Inc. Barrick responded with a hostile merger proposal. Eventually, investor support for Barrick's promise of nearly $5 billion of savings in Nevada nudged the two CEOs to the table. Six days after Mr. Goldberg joined Mr. Bristow in New York to discuss the partnership, an agreement for the Nevada joint venture was announced.

"I'm trying not to stick my finger up their nose anymore," Mr. Bristow said.

Write to Jacquie McNish at Jacquie.McNish@wsj.com, Alexandra Wexler at alexandra.wexler@wsj.com and Alistair MacDonald at alistair.macdonald@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
BARRICK GOLD CORP -1.22% 16.25 Delayed Quote.-10.74%
GOLD -0.23% 1274.4 Delayed Quote.-0.35%
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Financials ($)
Sales 2019 8 264 M
EBIT 2019 1 800 M
Net income 2019 621 M
Debt 2019 2 858 M
Yield 2019 1,40%
P/E ratio 2019 36,37
P/E ratio 2020 29,71
EV / Sales 2019 2,94x
EV / Sales 2020 2,76x
Capitalization 21 420 M
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Mean consensus HOLD
Number of Analysts 18
Average target price 15,7 $
Spread / Average Target 28%
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Managers
NameTitle
Dennis Mark Bristow President, Chief Executive Officer & Director
John Lawson Thornton Non-Independent Executive Chairman
Graham P. Shuttleworth Chief Financial Officer & Senior Executive VP
Gustavo A. Cisneros Independent Director
J. Brett Harvey Lead Independent Director
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