John Thornton seeks to reverse the fortunes of Barrick Gold Corporation (USA) (NYSE:ABX), the biggest gold miner in the world. Thornton saw many problems in the working of the company and promised to change the functioning of the company.
The company has faced quite a few problems in the past with some of its deals going sour. These include a Pass-Lama project where the estimated cost more than doubled before being halted.
Thornton believes that unlike other outstanding companies that tend to drift away Barrick might be able to reverse the drift. Barrick’s chief executive left last year and new individuals have now filled the executive position. Mr Thornton promises to watch the spending and make schemes so that executives hold shares like shareholders.
Barrick has lost its position as the most valuable gold miner by the market cap which means that the investors are taking their time before investing. The company also has a debt that is as large as its $13 billion stock market value.
Thornton also commented on the undesirability of large debts. Barrick has vowed to cut $3 billion in debt. According to Thornton, Barrick is confident about the disposals and more clearly understands the value of its assets.
Mr Thornton point to the turnaround of the Acacia Mining, which saw big improvements after a new CEO overhauled the operations.
Thornton believes that the Acacia Mining was considered a liability but became an asset. There could be other liabilities Barrick might have gotten wrong.
It remains unclear whether Barrick would diversify or remain focused on Gold due to mixed messages given by Barrick Gold Corporation (USA) (NYSE:ABX). According to Jorge Beristain, an analyst at Deutsche Bank, the compensation of executives is a cause of concern for the shareholders. On Newmont, Thornton commented that the company was not in Barrick’s radar. Thornton stated that his role was about setting a framework for Barrick to operate and compared himself to an architect.