Barrick Embraces ‘Boring’ Focus on Costs After Gold DropLiezel Hill
Barrick Gold Corp., which attempted to merge with a rival this year, says it’s likely to become “boring” as it seeks to improve its performance amid a faltering gold price.
“I hate to say it, but I think we’ll be kind of boring for a little while, as we continue to do all of these things and get all of the right pieces in place,” Co-President Kelvin Dushnisky said yesterday in an interview at the company’s Toronto headquarters.
The world’s largest gold producer is focusing on cost savings and better operational performance, the company said Oct. 29 when it reported third-quarter earnings. It’s also trying to strengthen its balance sheet and build relationships with groups such as regulators and local communities.
Barrick, which has operations in five continents, is focusing on investment in the Americas, especially Nevada and the Andes, where its biggest and lowest-cost mines are located, Dushnisky said.
For much of 2014, Barrick has been anything but boring. Talks to combine with Newmont Mining Corp., the biggest U.S. gold producer, broke down in April amid recriminations from both sides. At the end of that month, Barrick founder Peter Munk retired as chairman, and Chief Executive Officer Jamie Sokalsky departed last month without being replaced.
Munk was succeeded by John Thornton, a one-time Goldman Sachs Group Inc. executive who, prior to joining Barrick in 2012, had no mining experience. Barrick in July appointed Dushnisky and Jim Gowans as co-presidents to oversee day-to-day running of the company.
The company hasn’t resumed talks with Newmont, Dushnisky said, and is reluctant to look at acquisitions until the existing business has been improved.
Gold was little changed at $1,200.45 at 11:30 a.m. in Sydney. Barrick shares dropped 4.1 percent to C$13.75 yesterday in Toronto.
While the company will consider asset sales and partnerships, it’s not under any pressure to move on a deal and won’t have a “firesale,” Dushnisky said.
Barrick isn’t poised to announce any divestments, he said. The company would be more likely to sell assets outside of the two prioritized regions, as some may be worth more in other hands, according to Dushnisky.
Barrick is still “happy” with its majority holding in African Barrick Gold Plc, of which Dushnisky is chairman, and believes there’s more room for the London-based producer to increase its value, he said.
“We’re just really laser-focused on our own assets right now,” Dushnisky said. “We don’t want to be distracted at this point.”