BARRICK CEO Mark Bristow confirms that he and his chairman John Thornton are “100% on the same page regarding merger and acquisition (M&A) activity and that page is my page.”
He was responding to the statements made by Thornton in June at the London Indaba mining conference where Thornton appeared to be critical of Bristow’s hard-line, anti M&A stance.
Bristow has time and again stressed that his priority is to grow Barrick organically through developing its own greenfields projects although, during his career, he has pulled off some serious value-adding deals in the past such as the takeover of the Kibali mine in the Democratic Republic of Congo.
Thornton’s comments raised a few eyebrows when he said that “Barrick has been, in my view, very slow to say to themselves: the most important thing when you’re buying companies in the mining industry …is just buy it. We have not done that. We have insisted on getting into the weeds and that has been a mistake.
“With the cycles we have, and when the cycle is down and share prices are very low, and it’s a company you should buy, just buy it. Don’t spend a lot of time arguing around whether you should pay $6 or $8.”
Bristow was not at that conference. He told Miningmx that he spoke to Thornton about it afterwards.
He commented, “you know me and you need to look at what got me into this seat (as Barrick CEO) which was some reckless M&A transactions within Barrick such as the original Lumwana deal and Pascua Lama.
“There is no way that this company is going to go blind into any M&A activity and when I spoke to John about it, he said he has always felt the same way.
“John said he was looking specifically at Freeport (major copper producer Freeport-McMoran which owns the huge Grasberg mine in Indonesia) and, sure, it would have been nice to get Freeport.
“But you could never take on a company like Freeport without doing a proper due diligence because the market is acutely aware of the liabilities that sit with Freeport whether they are in Indonesia or Arizona.
“Also, Freeport did what I am doing. They resisted any type of approach because they believed in their investment in Grasberg and the fact that the sub-level caving investment was really going to deliver.”
Other interesting development highlighted at the London Indaba was that Thornton is now non-executive chairman at Barrick. When Bristow became CEO Thornton was appointed executive chairman.
That raised the immediate question of “who’s the boss?” Quizzed about this at the time by Miningmx Bristow replied “I run the company and John runs the board.”
Asked what had now changed for Thornton to become non-executive Bristow replied, “you saw what he said at the conference – ‘why was it necessary to be an executive chairman when Bristow is the CEO?’. He’s comfortable with the way the company is being run and it’s a natural progression. It’s something I have always believed in. You have one person running the company and his (Thornton’s) job is oversight through the board.”
Which begs another obvious question – one which Bristow ducked – and that is, so why had it taken Thornton so long to accept this officially?
