Barrick’s new CEO defends head-office job cuts as Randgold acquisition closes

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Barrick Gold Corp.’s new chief executive officer defended the company’s decision to lay off more than half of the staff at its Toronto head office before Christmas, saying it was a necessary move in a difficult market.

Barrick issued layoff notices to about 95 people at its headquarters in December, bringing its headcount down to about 65 people, The Globe and Mail reported on Dec. 21. In an interview, CEO Mark Bristow said there are no plans to shut the office entirely, adding that a continuing staff is needed to carry out treasury services, human resources and accounting.

In another sign of Barrick’s diminished presence in the country, the gold miner announced a revamped board of directors on which only one of nine members is Canadian. Leaving the board are Anthony Munk, son of Barrick founder Peter Munk; Toronto-based mining consultant Graham Clow; and Robert Prichard, who is chair of Bank of Montreal. Another Canadian director, Nancy Lockhart, stepped down on the eve of Barrick’s US$6-billion acquisition of Randgold Resources Ltd. after voicing disagreement to the deal, which closed on Jan. 1. The sole Canadian left on Barrick’s board is Michael Evans, the president of Alibaba Group Holding Ltd., who lives in New York.

In a phone interview from New York, Mr. Bristow said about the staff layoffs: “It’s a fact of rightsizing this organization.

“It’s appropriate for a gold-mining company of this stature, in this industry, at this time, in the global economy.”

After the Randgold deal, Barrick’s top positions are occupied by executive chairman John Thornton, Mr. Bristow and chief financial officer Graham Shuttleworth; the latter two are formerly with Randgold.

Joining Barrick’s new board are Mr. Bristow, Christopher Coleman and Andrew Quinn, all formerly Randgold directors.

The hollowing out of Barrick’s head office had been hinted at when the acquisition was announced in September. At Randgold, Mr. Bristow, a South African who was both the CEO and founder, was known for running a highly efficient gold miner with little or no ties to any specific country. While Randgold operated exclusively in Africa, its main stock listing was in London, and its head office in Jersey in the Channel Islands housed only a small number of people.

Mr. Bristow, who is also Barrick president, inherits plenty of challenges − and among the biggest is fixing a long-running dispute between Acacia Mining PLC, its 64-per-cent-owned subsidiary, and the Tanzanian government. In 2017, Tanzania accused Acacia of defrauding it of US$200-billion in taxes and imposed an export ban on gold-concentrate shipments.

Mr. Bristow says one of his priorities will be trying to end the Acacia impasse, but he gave no timeline on when that might happen, saying there was “a lot of work to be done.” Randgold operated in Tanzania at one point, and Mr. Bristow says relationships forged in the country will help in negotiations. He also left the door open to Barrick buying out Acacia’s minority shareholders once the dispute is resolved and bringing Acacia entirely back under the Barrick banner.

“All options are open,” he said. “We certainly have a responsibility to look very hard at every opportunity that delivers real value for our owners.”

Barrick spun out Acacia in a 2010 initial public offering but kept a majority position.

Mr. Bristow also made it clear that he will not be rushed into any fire sale of the company’s various non-core mines. In November, Barrick said it was in talks to sell its Lagunas Norte gold mine in Peru and that an announcement was possible before the end of last year. But on Wednesday Mr. Bristow said that while still possible, a sale of Lagunas is no longer imminent as he conducts his own review of Barrick’s portfolio of mines.

“I’ve put this whole process on hold just to get our heads around everything,” he said.

While Mr. Bristow will occasionally work out of the head office in Toronto, he said he will spend much of his time travelling around the globe to the company’s various mine sites. He’s already visited a number of Barrick’s major mines in the Dominican Republic, Argentina and Nevada and has coming trips planned to Chile and Peru, among other countries.