Barrick Gold chairman cements power as CEO steps down

Wed Jul 16, 2014 5:45pm EDT
 
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By Euan Rocha and Nicole Mordant

TORONTO/VANCOUVER (Reuters) - Barrick Gold Corp said on Wednesday its chief executive officer will step down in September and not be replaced, concentrating power in the hands of the miner's new executive chairman, John Thornton.

The world's biggest gold miner appointed two co-presidents to help run the company after Jamie Sokalsky's departure as CEO.

Thornton, who earlier this year took the reins from Barrick founder and long-time chairman Peter Munk, has already driven many of the company's recent moves, including an ill-fated attempt to merge with rival Newmont Mining and a joint venture with Saudi Arabian Mining Co, which is known as Ma'aden.

Sokalsky and Thornton did not see eye to eye, sources familiar with the situation said, making Sokalsky's departure unsurprising. Sokalsky did not lead the talks with Ma'aden and was cut out of the failed negotiations with Newmont, according to several sources. If the Newmont deal had succeeded, sources said that Barrick was set to name Newmont's current chief executive, Gary Goldberg, as its new CEO, and move Sokalsky out to head a spinoff entity with noncore assets.

Thornton, in an interview on Wednesday, played down talk of tension with Sokalsky and praised him for stabilizing Barrick as the miner grappled with soaring costs and heavy debt.

"When Jamie stepped in, it was really a battlefield type of promotion and he came in at a very difficult time," Thornton told Reuters at Barrick headquarters in Toronto. "He started driving the business toward lowering costs, focusing on cash flow and everything else."

"To his credit, he knew that by going this direction, he was going to be effectively restructured out of a job."

Sokalsky, a Barrick veteran, took on the role of CEO in 2012 when the company was struggling. He moved fast to mothball key projects, sell noncore assets and raise more than $3 billion via an equity offering.   Continued...