Barrick Gold’s Missed Opportunities and Future M&A Strategy

John Thornton, who joined Barrick Gold as a director in 2012, has identified a reluctance in mergers and acquisitions as a major mistake for the company.

“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 transitioned from his role as executive chairman of Barrick to a non-executive position after nearly a decade. Speaking at the London Indaba mining conference, he questioned the necessity of his former executive role given that Mark Bristow is the CEO. However, his remarks on M&A were particularly noteworthy, given Bristow’s well-known reluctance to pursue acquisitions.

Thornton emphasized, “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 buy it. Don’t spend a lot of time arguing around whether you should pay $6 or $8.”

Despite this view, Thornton was previously critical of Barrick’s 2011 acquisition of Equinox Minerals for approximately $7.6 billion, which was later impaired by $4.2 billion.

Equinox owned the Lumwana copper mine in Zambia, which Bristow recently described as being transformed into a tier one company under his leadership.

Bristow has cited Lumwana as evidence that Barrick doesn’t need to join the global race for copper resources. In February, he described current M&A activity 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.”

However, Bristow has not always shied away from competing for copper assets. In 2020, he made an offer to buy the Grasberg copper mine in Indonesia from Freeport-McMoRan when the company was valued at $10 billion, compared to $71 billion 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.