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Peter Munk, the iconic chairman of Barrick Gold Corp., is looking for a successor to the one person who has been a constant during the company’s tumultuous 30-year history: himself.
In a message to shareholders in the company’s annual report for 2012, Mr. Munk said he has been working with directors to find someone with the drive, ambition, global experience and contacts to lead the board, and strongly hinted that his co-chairman, former Goldman Sachs Group Inc. executive John L. Thornton, might be that man.
“A vital prerequisite for the future is a new generation of qualified and developed leadership,” Mr. Munk said in the letter. He did not provide a timeline for succession but lauded the achievements of Mr. Thornton. His appointment as co-chairman last year was part of a larger corporate shakeup that also saw the instalment of a new CEO, Jamie Sokalsky.
“It is indeed our great fortune that John has reached a point in his spectacular career at the same time when our need for someone of his exceptional qualifications, credentials and experience also reached a decision point,” Mr. Munk said.
The departure of Mr. Munk, 85, as chairman would end a significant chapter in the history of Barrick and the Canadian mining industry. What started with the purchase of a half-interest in a northern Ontario gold mine eventually became the world’s largest gold producer, with projects from Australia to Africa and a market cap of $29.3-billion.
But the company’s recent performance has been less than stellar, thanks in part to the overpriced acquisition of Equinox Minerals Ltd., an African copper play. Its share price, at $29.32, is about where it was seven years ago, even though gold prices have more than doubled in that time. In December, 2010, the stock touched $55.25 share.
“Although [Mr.] Munk should be given credit for building a Canadian champion, many investors suspect he is the architect behind the recent empire building gone bad,” said Pawel Rajszel, an analyst with Veritas Investment Research in Toronto. “A Munk departure could reduce investors’ fears of Barrick moving away from gold, and therefore eliminate the associated discount on the stock.”
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