TORONTO – Barrick Gold founder Peter Munk said Wednesday the time had come to say goodbye to the company he started more than 30 years ago, promising he was leaving the gold miner in good hands and describing a bright future for a firm coming off two less-than-stellar years.
“I think I’ll be saying goodbye to you soon,” Munk, 86, told Barrick’s annual meeting of shareholders at the Metro Toronto Convention Centre.
“I do it, not just because the time is right, but because I think I can hand it over to the best A-team Barrick ever had.”
Munk said his commitment to Barrick was never determined by his title or the perks that came with leading the world’s largest gold producer. He promised to remain involved in the company he built from as a part owner in a small mine in northern Ontario into a heavyweight worth some $22 billion, with more than a dozen mines around the world.
“All those things are not what makes me so much tied to Barrick and, therefore, that tie, that commitment, that desire to help and that emotional involvement will remain I think until I die,” he said.
“You can take, maybe, Munk out of Barrick, (but) you can’t take Barrick out of Munk.”
Munk’s retirement comes the same week that merger talks between Barrick and gold mining giant Newmont Mining Corp. collapsed amid a public spat and after two difficult years in which Barrick has had to take billions in impairment charges and see its stock trade for less than half of what it did less than two years ago.
The company has also been forced to stop work at its Pascua-Lama project in South America last year after massive cost overruns and a court ruling on environmental issues, shed what it deemed non-core operations and tackle debt loads.
It has also made changes to its board and its executive compensation after shareholders at last year’s meeting criticized the company’s awarding a $11.9-million signing bonus to incoming chairman John Thornton.
Munk said he was hurt and confused by the backlash. Such compensation, he suggested, was appropriate for the type of executive needed to run a company like Barrick.
“Yes, I can find a chairmain for Tim Hortons, you can find a chairman for a great bookshop, and it’s wonderful,” said Munk.
“But for God’s sake, this is a different job qualification, it’s a different kind of persona, it’s a different kind of international standing that Barrick needs today to take it to the next plateau. It’s easier to find guys who I can train to run a good Subway. It’s very hard to find an Einstein.”
But the colourful businessman, known as much for his trademark fedora as for his extraordinary philanthropic efforts, seemed determined to go out on a positive note.
He praised chief executive Jamie Sokalsky and Thornton, saying the new team was one he would “bet on.”
And while he described as “horrendous” the task of finding someone to replace himself, Munk said he knew it was something he had to do.
“As much as you like to believe that you’re eternal, the reality hits home at night time,” he said.
Munk, a Hungarian immigrant who fled his native country to escape the Nazis, started Barrick in 1983, acquiring a half-interest in Renabie, a gold mine near Wawa in northern Ontario. When he acquired Placer Dome in 2006, Barrick became the largest gold miner by production.
He wasn’t a mining engineer like many of the mining executives who came before him, but a dealmaker and visionary, while former Barrick president Bob Smith operated the mines.
He founded Barrick first as a oil and gas company and then a gold miner, after launching a hi-fi stereo company and building a chain of hotels in the South Pacific. He also established himself as a major real estate investor though Trizec Properties, which was sold to Brookfield Properties in 2006.
The annual meeting came as Barrick reported a first-quarter profit of US$88 million, or eight cents per share, compared with US$847 million, or 85 cents per share, a year ago.
Barrick said it was hit by issues such as foreign currency translation losses and the ramp down of the Pascua-Lama mining project on the border of Chile and Argentina.
Excluding one-time items, the company earned an adjusted profit for the quarter of $238 million or 20 cents per share. That compared with an adjusted profit of $923 million or 92 cents per share a year ago due to lower metal prices and lower gold sales volumes.
Outside the building where the annual meeting was held, protesters with a giant puppet of Munk with red paint on its hands and a Pinocchio nose accused the company of lying about its mining practices and causing unnecessary suffering in the areas it operates. But Munk said the mining industry has been a key driver of the Canadian economy.
“Jobs will not be generated by the post office. Jobs will not generated by more government and not by more NGOs,” he said.
“Someone has got to create and generate wealth. I count Barrick’s biggest achievement in Canada … the fact that we’ve been able to successfully employ young Canadians, young people globally, and provide them with opportunities.”