WHO’S WHO » GOLD
An unlikely duo: Barrick’s chairman John Thornton and CEO Mark Bristow are dictating the agenda in the gold mining industry
With almost 6m ounces of gold production from Nevada, Mali and the D.R.C., Barrick is hard on the heels of Newmont as the world’s largest gold producer
Eggs were laid at Barrick’s gold mines in 2018; its mines across Africa are so large they have their own churches, hospitals, farms and cocoa plantations
On the edge of a large gold mine in the Democratic Republic of Congo, a small radar scans the horizon looking for electrical storms that roll in over the jungle; a direct lightening strike can knock out the mine's power station. Churning out 800,000-ounces per annum, Kibali was built by Mark Bristow, one of the greatest wealth builders in the industry, a burly South African who, after years criticising the gold mining sector, now sits at its top.
Born on a farm, one of five brothers, Bristow did national service, fighting guerillas in Namibia and Angola. “It's going to be hectic,” he says, before jumping on a dirt bike or diving into a takeover battle. Studying soil science and geology, Bristow went into South Africa's gold mining industry in the ‘80s, emerging with a parcel of exploration assets listed in London as Randgold Resources in 1997. Two decades on, he had built five mines in three of the world's toughest countries, Mali, Cote d'Ivoire and the D.R.C., and London's largest gold producer. As rivals lost ground to ETFs, Bristow pushed Randgold to a premium; despite coups, riots and shut downs, he has never reported a quarterly loss and never recorded a write-down. Gold companies can be cash-rich and debt-free with high grades and high margins, he says, providing that's what you plan for. “If you invest at the top and try to survive at the bottom, you won’t create much value.”
Then Barrick’s chairman John Thornton came knocking; the two companies merged in an $18bn deal and Bristow became CEO, launching a $42bn bid for rival Newmont, bouncing CEO Gary Goldberg into a joint-venture in Nevada. “My suggestion is that Gary gets his team up here tomorrow,” Bristow told the FT. “I don’t give away premiums that haven’t been earned.”
Bristow “talks a phenomenal game”, one banker says. He has also assaulted Barrick's Toronto head office, reduced to 70 people, down from a peak of 500. “Within his first month here he significantly advanced our decentralization program,” Thornton says more diplomatically. That cuts $135m off Barrick's G&A. “I am always accountable and everybody reports to me,” Bristow tells MiningMX. Aged 60, hobbies include skydiving, climbing Mount Kilimanjaro, shooting elephants and buffalo. “For me, sleep is the biggest waste of time,” Bristow told The Northern Miner, landing a 550lb blue marlin off the coast of Mauritius.
“The one thing about business is that it eventually kills you… If you don’t perform, the options run out.”
Barrick’s CEO Mark Bristow has relied on the same lieutenants for 20 years. Finance director Graham Shuttleworth worked on Randgold’s listing in ‘97 as a South African accountant at Deloitte, then in his 20s. He
moved to HSBC in New York and took the relationship with him, working on a $1.8bn bid for AngloGold, before joining Randgold full-time, juggling dividends, tax and its large cash balance. Merging with Barrick adds asset sales to the mandate: with 24 operations on five continents, dismantling part of the portfolio could generate $1.5bn. “There’s no new team,” Bristow says. “This team has been together for two decades.”
When a coup hit Mali in 2011, shares in gold miner Randgold wobbled. Its Loulo complex in the country was one of its biggest cash flow generators. But one large investor held firm. Catherine Raw, a fund manager at BlackRock in London, who had worked for Anglo American shadowed by an armed guard in Johannesburg, had spent time with Randgold's CEO Mark Bristow at its mines across Africa and knew how plugged-in Bristow was. “You have to understand where Randgold is placed within the country, how important it is to the country’s GDP and also the strong links it has made with politicians and the government,” Raw explained at the time.
7 years on, she bought the whole company. Having been hired by Barrick’s chairman John Thornton, Raw moved to Toronto, pushing for an $18bn mega-merger with Randgold that vaulted Bristow to the top of the industry. Still only 36, as head of North America, Raw has taken on the most critical post in the new group.
Raw wanted to be an astronaut when she started studying geology at Cambridge in 1999, but instead joined the mining desk at Merrill Lynch, bought by BlackRock. Seen by colleagues as “a brain-box”, she is bullish on gold and China and sees mining through the prism of financial returns. Calls include a bet on zinc before prices ran-up in 2016. Whilst other money managers are guarded, Raw is granular on everything from balance sheet gearing and interest rates to railway policy in China.
Jumping to Barrick was a one-off opportunity. “Taking the leap from being an investor in the mining industry to actually putting the theory into practice was the bravest, most exciting moment of my career.” Rethinking Barrick's Nevada assets will be the biggest test yet. Bristow has strong-armed rival Newmont into a joint-venture in Nevada and Raw is now charged with leading the business, combining fleets, upping gold grades, integrating supply chains, flattening the corporate structure, bundling together roasters, mills and autoclaves, folding 12 mines and 3.5m ounces of gold per annum into one operation. Bristow has flagged $4.7bn to $7bn of potential savings. “This is a first pass, and we would expect these to go up not down,” Raw has told analysts.
“The biggest challenge for our industry is attracting talent,” she tells Women in
Having been parachuted into Barrick Gold with a $12m signing-on bonus in 2013, John Thornton seemed to do little at all. “Think of me as both architect and spiritual keeper of the flame,” he told the Financial Times two years into the role.
Then on January 1st 2019, ringing the bell of the New York Stock Exchange, Thornton pioneered the most imaginative M&A tactic finance has ever seen. A former Goldman Sachs banker, he had just closed his first “take-under”, as brokers dubbed the deal: if a transaction is compelling enough, investors in a target company should pay to support the deal. The market agrees: Barrick softened investors up to the idea with an $18bn nil-premium merger with Mark Bristow’s Randgold. As shares in both surged higher, Thornton levelled a $42bn bid at Newmont’s board, priced at an 8 per cent discount to its share price. Savings on the table of $7bn was premium enough, Barrick argued. Ditto with Acacia Mining, its Tanzania subsidiary: paying $787m to re-amalgamate the group, valued at $1.4bn on Barrick's books, was an “elegant” solution.
Born in New York, school friends with the Ford family, Thornton joined Goldman Sachs in the ‘80s and was soon running its London business, flying to China to underwrite state-backed equity deals. “With his floppy hair and horn-rimmed glasses,” Thornton became a “silky, ubiquitous presence on both sides of the Atlantic,” says The New York Times.
Having sat on the board of microchip giant Intel, Rupert Murdoch's NewsCorp, the Brookings Institute in Washington and China's largest bank, no-one in mining has held such disparate roles. Inside Barrick his chief role is ushering the board, from Las Vegas newspaper magnate Brian Greenspun to oil man Brett Harvey. “I run the company, John runs the board,” CEO Mark Bristow says. “There’s a role for both in a business of this size and complexity.”
Unpredictable even for mining, only Thornton, 65, knows what he plans next. De-merging Barrick's 400m lbs of copper production is one option on the table. “When I arrived, Barrick was running a four-hour marathon,” he tells Reuters. “Maybe now they're running it at two hours and 55 minutes. You know the world record is 2 hours, 1 minute and 39 seconds, right? That's where it's headed. Just by picking up the pace, there’ll be a self-selection process. Some people will say this is not for me.”
Live in New York. Owns a rice plantation in South Carolina.