Barrick has been too reticent on M&A, says chairman

John Thornton, non-executive chairman, Barrick Gold

JOHN Thornton listed a reticence in mergers and acquisitions as a number one mistake since becoming a director of Barrick Gold in 2012.

Barrick has been, in my view, very slow to say to themselves: the most important thing when you’re buying companies in the mining industry … is just buy it. We have not done that. We have insisted on getting into the weeds and that has been a mistake.”

Thornton, recently switched his chairmanship of Barrick to a non-executive role after nearly ten years as executive chairman.

Speaking at the London Indaba, a mining conference this week, Thornton rhetorically questioned why was it necessary to be an executive chairman “when [Mark] Bristow is the CEO”. But it was his comments about M&A which were noteworthy if only because Bristow is famously relucant to delve into acquisitions.

Said Thornton of M&A: “With the cycles we have, and when the cycle is down, and share prices are very low, and it’s a company you should buy, just but it. Don’t spend alot of time arguing around whether you should pay $6 or $8″.

Despite having this view, Thornton was previously highly outspoken regarding Barrick’s 2011 acquisition of Equinox MInerals for about $7.6bn which it subsequently impaired for $4.2bn two years later. Equinox owned the Lumwana copper mine in Zambia which Bristow said recently was being transformed into a tier one company under his leadership.

Bristow cited it as an example of why Barrick didn’t need to join the global race for copper resources. In February, he described current M&A as “delusionary”, adding: “This is one of the key qualities that differentiates Barrick from its peers.

“Barrick is not forced to buy its growth. This growth is organically embedded in our business but people underestimate this”.

Bristow did, however, previously compete for copper assets. In 2020, he offered to buy Grasberg, a copper mine in Indonesia, from Canadian firm Freeport-McMoRan when the company was valued at $10bn compared to $71bn today.

“As the leader of the most valuable gold company in the world, I should be looking at the world’s best gold mines,” Bristow said in 2020.

“It makes sense for us to be interested in looking at Grasberg and asking ourselves whether Freeport is going to remain an independent company or not,” he told the Financial Times.