Barrick: Thornton takes control April, former De Beers exec becomes COO
Gold mining giant Barrick (TSX, NYSE:ABX) board has chosen John Thornton, 59, to be the new leader of the world’s largest gold miner as founder Peter Munk plans to end his long career at the helm of the company.
Thornton will take over at the company's annual general meeting scheduled for April. The two departing directors are former prime minister Brian Mulroney and Howard Beck.
Former Canadian prime minister Brian Mulroney and Howard Beck are to step down from the board while Ned Goodman of Dundee Corp., Nancy Lockhart of Frum Development Group, former University of Toronto president David Naylor and Ernie Thrasher, CEO of Xcoal Energy & Resources have been appointed.
In a statement the gold giant said James Gowans, the former CEO of diamond giant De Beers' Canada unit takes up the position of chief operating officer in January.
John Ing, president of Maison Placements in Toronto, said both Goodman and new COO Gowans bring welcome mining experience.
"The addition of Gowans as a COO harkens back to when they had Bob Smith and his team," he said, referring to Barrick's legendary president from 1987 to 1996, who helped build the miner into a global powerhouse.
Despite having limited mining experience, Thornton brings to Barrick a significant contacts portfolio he built up in his days at Goldman Sachs Group from 1980 until 2003.
Not only did he become president of the global investment bank dealing with several Chinese firms, but he also helped start up a business leadership program at Beijing’s Tsinghua University and sits on the board of China Unicom, the country’s second-biggest cell-phone carrier.
The executive has also been a professor at Washington’s Brookings Institution, where a China-focused research centre bears his name and is also a member of China Investment Corp.’s international advisory board.
With that background, it seems logical to think that Thornton may try to get a helping hand from China —perhaps as a joint-venture partner— for some of the company’s projects, since the Asian country is the world’s largest consumer of the precious metal.
The leadership change at the Toronto-based miner comes at the end of a difficult year for the company. This year alone Barrick has lost 45% of its market value, with debt levels soaring due to low gold prices, rising operating expenses and a cost blowout at its $8.5 billion Pascua Lama project in the Chile-Argentina border.
The firm has faced pressure since before its annual meeting earlier this year, when shareholders voted against a largely symbolic executive pay resolution.
Since then, Barrick has been working on improvements to its corporate governance, with analysts saying that Thornton has what it takes to change the company’s direction.
In fact, the US-born businessman is expected to bring even more changes, as he has made clear he is quite open to rethink the entire business, which may involve acquiring mining assets in other commodities, such as copper.
Image from a Brookings Institution video.