Ex-Barrick CEO Sokalsky joins junior Probe Mines as chairman
This July, after two years at the helm of the world’s largest gold miner, Jamie Sokalsky stepped down as President and CEO of Barrick.
Fast forward a few months and Sokalsky announced this morning that he would be joining a junior exploration and TSX Venture-listed company as Chairman.
Probe Mines (PRB:TSXV), which is developing a high-grade gold project in Ontario, surprised investors this morning with their appointment of Barrick’s former boss (Sokalsky) to its Board of Directors and announcing that he will become Chairman after the current one steps down at the company’s AGM on October 29th.
Probe’s position in the market is a far cry from Barrick’s. It is a single-asset development company with a market cap 1/100th that of Barrick’s which is roughly $20 billion today.
To put this in perspective, Barrick’s Cortez mine in Nevada produced 1.3 million ounces of gold last year. Probe’s main underground gold asset has a total Indicated resource of 1.6 million ounces. Barrick produced over 7 million ounces of gold last year.
Dr. David Palmer, President and CEO of Probe, stated: “We are excited about the opportunity to work with Jamie. His knowledge, experience and skill will greatly assist Probe as it advances the exploration and development of the Borden gold project. On behalf of the board of directors and management, I welcome Jamie to our team.”
Sokalsky worked his way up the Barrick ranks over a two decade career there and was appointed President and CEO in June 2012 after being CFO from 1999 to 2012. He was put in charge at a time when gold prices were plummeting and the gigantic gold miner was floundering. He shrank their asset base from 27 mines to 19 and shed nearly $1 billion of unprofitable operations. He made the decision to mothball Pascua Lama amid sky rocketing costs and legal and environmental setbacks.
Sokalsky also led Barrick’s $3 billion bought deal financing which was the third largest in history (Barrick also holds the title of the largest for their $4 billion offering in 2009).
At the time of Sokalsky’s departure his salary was $7.7 million. Probe will issue him 500,000 5-year options at a price of $2.41. I think it’s safe to say he isn’t joining Probe for the pay or the ‘lifestyle’.
After Osisko’s bitter takeover battle, the desire for major gold companies to have predictable and stable production in Canada became that much more evident.
Holding senior management roles at Barrick for over 15 years, I would assume Sokalsky has some invaluable connections at both Barrick and other major mining houses. Perhaps he sees Probe as a prime takeover target in the future?
Shares were down $0.02 to $2.39 on 24,000 shares traded at the time of writing.
By: Travis McPherson