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Barrick chairman says miner eyes nimble future after Randgold deal

Published 2018-11-05, 05:02 p/m
© Reuters.  Barrick chairman says miner eyes nimble future after Randgold deal
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By Susan Taylor

TORONTO, Nov 5 (Reuters) - If all goes according to plan, Barrick Gold ABX.TO will have fewer mines and workers one year after acquiring Africa-focused Randgold Resources RRS.L , the Canadian miner's executive chairman said on Monday, as its investors approved the deal.

Votes were 99.8 percent in favor of the $6.1 billion, no-premium transaction, Barrick said, confirming a Reuters report. After Randgold's Nov. 7 vote, the all-stock deal is seen closing Jan. 1, 2019.

"Ideally, we will have sold certain assets that don't fit ... that's number one," Barrick Executive Chairman John Thornton said, describing how he wants the combined company to look in a year. "Number two, we will be demonstrably more efficient."

If conditions are right, Thornton said he would like to replicate the deal-making pace he set when Barrick made seven asset sales over 18 months.

After the merger, Barrick will focus on low-cost mines producing 500,000 ounces of gold annually with at least 10 years of operations. It currently has five such mines.

It is also poised for further streamlining under Mark Bristow, who currently runs Randgold and will become CEO of the combined company.

While Barrick has reduced administrative jobs from 1,400 to about 300, Randgold has only seven people at its head office, Thornton said. Barrick will not cut that far, but is considering the ideal size, he added.

"When I arrived, Barrick was running a four-hour marathon. Maybe now they're running it at two hours and 55 minutes. You know the world record is two hours, one minute and 39 seconds, right? That's where it's headed," he said.

"To get there, just by picking up the pace, there'll be a self-selection process. Some people will say this is highly motivating ... and some people will say this is not for me, I just don't want to run that fast."

Bristow will study each mine in detail, determine how they should best operate and make employees accountable for that performance - an accountability task Thornton will relinquish, as he focuses on asset sales.

Barrick is in "essentially constant communication" with such potential partners as Newmont Mining Corp (NYSE:NEM) NEM.N and Chinese miners, he added, so that deals can close quickly when the timing and price is right.

Barrick shares have climbed 26 percent and Randgold's 29 percent since the deal was announced in September, Thornton said, outpacing a 1.7 percent gain for senior gold producers.

It is equally important that Bristow fix an acrimonious tax dispute for Barrick's Acacia Mining unit ACAA.L , Thornton said. Tanzania's government has accused Acacia of tax evasion, which Acacia denies.

Barrick announced a framework agreement last October, but it has not been enacted. "It simply takes time," for the government to process, Thornton said, adding that "the pacing of the resolution is up to them."

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