Ex-Goldman Vice Chairman Joins Thornton on Barrick’s Board

Jul 31, 2014 5:02 pm ET

(Updates with closing share price in 13th paragraph.)

July 31 (Bloomberg) -- Barrick Gold Corp. appointed former Goldman Sachs Group Inc. Vice Chairman J. Michael Evans as a director, joining his former colleague John Thornton on the board of the world’s largest miner of the precious metal.

Evans, who had been seen as a potential successor to Goldman Sachs Chief Executive Officer Lloyd C. Blankfein, had worked with Thornton, now Barrick’s chairman, in New York and London.

The appointment of Evans, as well as Nevada businessman Brian Greenspun, as independent directors follows a series of leadership changes at Barrick in the past year. The Toronto- based company said on July 16 that CEO Jamie Sokalsky would leave Barrick in two months and his responsibilities shared among other executives, including two newly appointed co- presidents.

Thornton became Barrick chairman in April, replacing founder Peter Munk, as part of a previously announced board shakeup in which two other long-time directors departed and four new independents were added.

Evans, a Canadian, won an Olympic gold medal in rowing in 1984, the same year he earned a master’s degree from Oxford University. He was named a Goldman Sachs partner in 1994, a year after he joined the bank from Salomon Brothers.

Asian Experience

Evans brings Asian experience to Barrick, which Thornton has said is interested in investment from China and forming partnerships with Chinese groups. Evans was chairman of Goldman’s Asia operations from 2004 to 2013 and was the global head of Growth Markets from January 2011 to December 2013, Barrick said.

Evans also is a nominee to the board of Alibaba Group Holding Ltd., the Chinese e-commerce company that’s preparing for an initial public offering.

Thornton himself is well-connected in China. After he left Goldman Sachs in 2003, he helped start up a business leadership program at Beijing’s Tsinghua University, and he currently is a member of China Investment Corp.’s international advisory board.

Evans was seen as a potential successor to Blankfein along with Goldman Sachs President Gary Cohn, the Financial Times wrote in 2010.

Evans “has a highly distinguished track record in finance and banking with deep knowledge of the global investor community, which will be of great value as we work to attract new, long-term investors and other strategic partners,” Andy Lloyd, a Barrick spokesman, said yesterday in an e-mailed statement.

Media Group

Greenspun, the chairman and CEO of Greenspun Media Group, built a small family newspaper business into a diversified group of companies spanning publishing, cable television, Internet and real estate, Barrick said. He was appointed by President Bill Clinton to the White House Commission on Small Business in the early 1990s, Barrick said.

The gold miner announced the director appointments yesterday in its second-quarter earnings statement, where it reported a quarterly profit excluding a $514 million writedown on its Saudi Arabian copper project and other one-time items of 14 cents a share. That compared with the 15-cent average of 23 analysts’ estimates compiled by Bloomberg.

Barrick fell 2 percent to C$19.74 at the close in Toronto, while gold futures on the Comex in New York declined 1.1 percent to $1,282.80 an ounce. Barrick’s shares have gained 5.5 percent this year.

Reduced Costs

Its second-quarter net loss narrowed to $269 million, or 23 cents a share, from $8.56 billion, or $8.55, a year earlier. The year-ago figure included $8.7 billion of writedowns mainly related to gold-price declines. Sales in the most recent quarter fell 24 percent to $2.43 billion, missing the $2.46 billion average estimate.

Barrick also reduced its cost guidance for the year. So- called all-in sustaining costs are forecast at $900 to $940 an ounce of gold, compared with a previous range of $920 to $980, Barrick said in the statement. The company reported second- quarter costs of $865 an ounce, compared with $910 a year earlier and the $941 average of three analyst estimates.

Barrick is among producers working to reduce costs after the metal’s 28 percent slump last year, the most in more than three decades. The world’s biggest gold miners have cut budgets, sold less-profitable assets and adjusted operating plans to improve efficiencies.

Barrick has trimmed its portfolio of mines to 19, from 27 in 2013, by selling and closing smaller and higher-cost operations. The miner’s goals of being the leading gold company and a leading copper producer don’t require it to be the biggest, Thornton said in a July 16 interview.

Gold averaged $1,290 an ounce on the Comex in the second quarter, 9 percent less than a year earlier and 0.3 percent lower than the first quarter.

--With assistance from Christine Harper and Michael J. Moore in New York.