Jan 2, 2019
‘We definitely need more assets in Canada,’ Barrick’s new CEO says
Barrick Gold Corp. (ABX.TO) needs more assets in Canada, the gold miner’s new chief executive officer said Wednesday, on the company’s first day of trading since its recent acquisition of Randgold Resources Ltd.
“Barrick is back,” 59-year-old Mark Bristow told BNN Bloomberg in an interview from the New York Stock Exchange. “We should be proud of being team players in the Barrick family, and one of the things that I really am focused on is we definitely need more assets in Canada. ”
Barrick currently operates just one mine in the country – Hemlo Mines – east of Thunder Bay, Ont.
“Don’t get too hung up right now on us only having Hemlo,” Bristow added. “We’re definitely focused on growing this business and you’re correct if you’re recognizing that we’re underweight in our investments in Canada.”
Bristow said he would be looking for what the company refers to as Tier 1 assets, ones that produce 500,000 ounces of gold annually for more than 10 years. Currently, Bristow said he looks for a 15 per cent internal rate of return with a long-term gold price of US$1,200 per ounce.
Bristow added he would still buy into what he referred to as a second-tier investment, which would produce 300,000 ounces of gold annually for 10 years of production. For a smaller gold asset, Bristow said he would look for a 20 per cent return using a long-term gold price of US$1,000.
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In November, shareholders of Randgold voted in favour of the merger with Barrick, which was first announced back in September. The combination will add gold mine properties in Mali, Senegal, Ivory Coast and the Democratic Republic of Congo to Barrick's portfolio.
The deal, which valued Randgold at about $7.9 billion when announced, also saw Bristow, who had been the Randgold chief executive since 1995, move to the top job at Barrick.
Leading up to the vote, Barrick sweetened its offer to Randgold shareholders by boosting the dividend offer for 2018 to US$2.69 per Randgold share from the US$2 initially proposed. Barrick shareholders voted more than 99 per cent in favour of the deal.
The Globe and Mail first reported last month Barrick laid off nearly 95 staff members at the company’s head office in Toronto, leading to questions about the company's future in Canada. Even though Bristow resides outside of the country, he said the miner’s corporate office will remain in Toronto.
“I’m not a person who hankers after an office – my passion is in the operations, working with the management teams,” he said.
“I will definitely be coming through Toronto, it will be my corporate base, and you’ll see more of me,” Bristow said. “But at the same time, my focus is out there where the real value creation should be realized and that’s where I’m going to spend my time.”
On Wednesday, Barrick began trading on the NYSE under the ticker symbol GOLD. It will continue to trade on the Toronto Stock Exchange under the symbol ABX.
