Barrick to reap the rewards of Randgold acquisition

The Super Pit.

Barrick Gold is expecting to benefit within just 12 months of completing its acquisition of Randgold, the world’s largest gold merger.

Under the newly merged company, which is still known as Barrick, mining plans are being shifted from primarily maximising the cash-flow to optimising the orebody and the margins.

There are now mineral resource management teams at each of Barrick’s mines, with strong regional executive teams in every one of Barrick’s three geographical zones including Australia.

Supporting them is a corporate team with a mix of skills and experience, which chief executive Mark Bristow believes is “unequalled in this industry.”

“The corporate office and its satellites are being restructured to move people and functions out of the backrooms and into the operations where they belong,” he said.

“At the same time, all our systems are being upgraded to give managers access to consistent real-time data to facilitate speedy and accurate decision-making.”

Bristow upon announcing the planned merger in September 2018 said the gold mining industry had been criticised for its short-term focus, undisciplined growth and poor returns on invested capital.

“The merged company will be very different. Its goal will be to deliver sector leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business, and be prepared to make tough decisions,” Bristow said.

“By employing a strategy similar to the one that proved very successful at Randgold, but on a larger scale, the new Barrick Group will leverage some of the world’s best mines and talent to create real value for all stakeholders.”

The former Randgold chief executive has converted his entire shareholding in Randgold to Barrick shares, and now owns over five million of them, according to Barrick lead director Brett Harvey.

According to Barrick, chairman John Thornton also delivered against “all the objectives set for him in 2018 and this, together with the fact that he personally developed an executed the nil-premium merger with Randgold which strengthened Barrick’s position across all core metrics relative to its senior gold peers, is reflected in his incentive compensation for the year.”

Thornton now holds 5.215 million shares – which he must hold until retirement – further building on his substantial ownership position of more than five million Barrick shares.

The Barrick share price on the New York Stock Exchange (NYSE) rose by 29 per cent since the company’s announcement of the merger up until its completion on January 1 2019, increasing the company’s market capitalisation by $3.6 billion, the company stated in a media release.

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