It took Barrick Gold Corp. a year and a further 14 percent decline in gold prices to abandon a joint-president structure.
Co-President Kelvin Dushnisky will take over as sole president of the world’s largest gold producer, effective immediately, Barrick said Monday in a statement. Jim Gowans, who had served as co-president, becomes an adviser to Chairman John Thornton until Gowans’ retirement at the end of the year, the Toronto-based company said.
Barrick, which is selling assets and cutting costs after prices slumped to five-year lows, unveiled the system of co-presidents in July last year when Chief Executive Officer Jamie Sokalsky’s departure was announced. In Monday’s statement, it said the latest management changes were part of efforts to be more focused and efficient.
Barrick rose 2.1 percent to C$10.28 at 12:17 p.m. in Toronto. The shares have lost 50 percent in the past year.
“The street has been advocating for direct lines of responsibility,” John Stephenson, founder of Toronto-based Stephenson & Co. Capital Management, who is shorting Barrick stock, said by telephone. “Getting rid of the co-president role is smart.”
In other changes announced Monday, Chief of Staff Richard Williams was appointed chief operating officer, reporting to Dushnisky, while Basie Maree becomes chief technical officer under Williams.
“The structure is designed to take overhead and other costs out of the business and to maximize cash flow,” company spokesman Andy Lloyd said by telephone. “We’re really taking Barrick to a lean, entrepreneurial company.”
The co-president structure probably was implemented to provide operational support for Dushnisky, said Kerry Smith, a Toronto-based analyst at Haywood Securities Inc.
“I thought at the time it was probably a temporary thing,” Smith said by telephone. “Kelvin lacked operating experience and Jim Gowans had lots. Otherwise, Kelvin is a good fit to be president.”