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Aaron Regent (Anthony Jenkins/The Globe and Mail)
Aaron Regent (Anthony Jenkins/The Globe and Mail)

The Lunch

Aaron Regent: A new-generation CEO Add to ...

When Aaron Regent walks into Ki, a modern Japanese restaurant in the heart of Bay Street, amid a cluster of other dark-suited businessmen during a recent lunch hour rush, his presence is immediately noted.

Within seconds, the hostess greets him as "Mr. Regent" and whisks him and his party to his usual table, a quiet corner booth located alongside a calming rock and marble water feature.

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Ki is a regular lunch spot for Mr. Regent, in part because it's located inside Brookfield Place, the same downtown Toronto office tower that is home to the head office of Barrick , where he celebrates his two-year anniversary as president and chief executive officer next month. The Irish-born executive has spent much of his career around this particular square mile of prime real estate, working either at Brookfield Asset Management (where he was, most recently, co-head of its vast infrastructure group) or within the nexus of companies affiliated with it.

So when he was offered the Barrick job by legendary founder Peter Munk, the physical move was easy - he merely had to change floors. That is where the simple part ended, however.

Barrick is a complicated beast with interests in 25 mines scattered across five continents, each with its own challenges. And while Mr. Regent joined at a time when investment demand for gold was on the upswing (and still is), that was hardly an unvarnished blessing for the world's largest producer of the yellow metal.

For a gold company, Barrick had earned a healthy dose of skepticism and even outright disdain from gold fanatics, owing largely to its huge book of contracts, or hedges, in which the company had agreed to sell gold in future years at pre-determined prices. The hedging strategy was a creation of an earlier time, when much lower gold prices prevailed.

It had been a useful tool for smoothing out the volatility and risk in gold - "hedging really built the foundation for Barrick," Mr. Regent says - but by the time of his arrival in early 2009, the derivatives had become a giant weight on the company. Hedging losses drove Bay Street's perception of the company, suppressing its stock price, which was remarkably gravity-bound even as gold moved from a low of about $250 (U.S.) an ounce through $1,000 and, more recently, to $1,400.

So his first big move was the painful but necessary winding down of the hedging program, which led to a writeoff of nearly $6-billion. He also cut 80 executive jobs to help slash the budget. Earlier this year, he hived off Barrick's African assets into a separate publicly traded company on the London Stock Exchange, in hopes that the freedom and scrutiny of a listing would help squeeze more growth out of its high-cost operations.

Today, investors are anxiously awaiting Barrick's next move, which many believe will be an acquisition after a flurry of recent deals in the sector. Mr. Regent and his team have been noticeably quiet when it comes to deal making since increasing the company's stake in the Cerro Casale project in Chile in March and, weeks earlier, losing a bid for a controlling stake of the El Morro project in Chile to competitor Goldcorp Inc. (Barrick opposes the way the deal was handled and has taken the issue to court.)

Now that Barrick has bounced back following Mr. Regent's restructuring, many see it as the logical time for the company to make its next purchase.

If Mr. Regent feels the pressure to pounce, however, it doesn't show. Carefully cutting off a slice of his tuna burger with a fork and knife, the soft-spoken 44-year-old executive insists he's in no hurry to do a deal. Of course, he says, Barrick is always looking. He realizes, as most gold executives do, that global reserves of the precious metal are constantly shrinking.

"You shouldn't be surprised to see us do a transaction," Mr. Regent says, his voice barely audible over the din of the surrounding lunch-hour conversation and a constant clattering of cutlery and plates. "But I think that we are fortunate that we are in a position where we don't have to do a deal."

And despite the handful of acquisitions by its main rivals in recent months - including Goldcorp's $3.6-billion purchase of Andean Resources Ltd. and Kinross Gold Corp.'s $7.1-billion takeover of Red Back Mining Inc. - Mr. Regent insists Barrick hasn't been left out of the race for resources. "We don't feel like we missed anything, let's put it that way," Mr. Regent says.

He argues that the company, with a market capitalization of more than $50-billion and an industry-leading production target of nine million ounces within five years (up from an expected 7.7 million this year), can afford to be choosy. Besides, there will be plenty of other opportunities. No major gold asset comes for sale without Barrick knowing about it. "We seem to be everybody else's exit strategy, and whenever there's a transaction, our name comes up, which is understandable," Mr. Regent says.

The calm attitude he portrays comes from the confidence his chairman, the well-regarded Mr. Munk, has shown in his latest recruit. At the company's annual meeting last spring, Mr. Munk heralded his rising star CEO for his "courage" and his "enormous thinking, enormous conviction," at Barrick so far.

According to Mr. Regent, who was humbled by those remarks, the two have a close working relationship - yet Mr. Munk remains hands off on the day-to-day running of the business. Mr. Regent dismisses the suggestion that Mr. Munk still pulls the strings at the gold producer he founded nearly 30 years ago.

"Peter doesn't get involved in the operations," Mr. Regent says between bites of sweet potato wedges and salad. "Where he is interested is the strategy, corporate development side of things, which is great for us. He has a worldwide Rolodex."

While Mr. Regent may look to veteran mining executives for inspiration, he represents a new generation of CEOs in the industry who appear less flamboyant than their predecessors, but have savvy management skills.

He shuns traditional management textbooks, however. "There is nothing better than actually just doing, and accepting, that you are going to make mistakes," he says. "I often think things are usually pretty simple. If you distill it to its essence ... what are the issues you are trying to deal with?"

For Mr. Regent, the experience of "doing" comes largely from his time in executive roles at base metals miner Noranda Inc. and Falconbridge Inc., as well as his time before and after at Brookfield.

Two decades later, and after going back and forth between the mining industry and Brookfield, the married father of three daughters is one of Canada's youngest and highest-paid CEOs, running one of the country's largest companies. When he turns 45 next month, with another 20 years or more left in his career, Mr. Regent will have achieved more than some mining executives do in a lifetime.

Still, he appears to keep it in perspective. His humble roots may help, but there is also immense pressure on gold executives now, to keep their companies growing and attract the attention of investors who have more options than ever for getting exposure to gold, including the onslaught of bullion-backed exchange-traded funds.

Then there's the threat that gold's meteoric rise, which skeptics say is nothing more than the next financial bubble, will eventually pop.

Mr. Regent, like most gold company executives, believes there are strong fundamentals in place to back the rising price of gold. But it's his job to keep Barrick investors happy no matter which direction gold goes, and he knows it.

"At the end of the day I am here at the leisure of our shareholders," he says just before heading back upstairs to his office. "You never own the chair. You borrow it."

______

CURRICULUM VITAE

Early years

Born January, 1966, in Dublin, Ireland. Immigrated to Canada as a child.

His parents were entrepreneurs. His father was self-employed as a painter and wallpaperer, while his mother opened her own dance school for children, The Regent Academy of Irish Dance, which she still runs today.

After graduating from high school in Calgary, and taking on a series of part-time jobs from bus boy to labourer, Mr. Regent went east to study history at the University of Western Ontario in London, Ont., not knowing what type of profession he would pursue.

Graduated from UWO with a Bachelor of Arts in 1988, then obtained his chartered accountant designation.

Career

1991: joined Edper/Brascan Corp. (now Brookfield Asset Management) as associate controller, after articling with Ernst & Young.

Spent the 1990s in a variety of roles with the Brascan group.

2000-02: executive vice-president and chief financial officer, Noranda Inc.

2002-05: president and CEO of Falconbridge Inc.

2006: president of Falconbridge after its merger with Noranda. (The combined company was sold to Xstrata PLC in 2006.)

2006-09: senior managing partner of Brookfield Asset Management Inc. and co-CEO of its Infrastructure Group.

Jan. 16, 2009, to the present: president and CEO, Barrick Gold Corp.

Mentors

Jack Cockwell of Brookfield Asset Management, ex-Falconbridge CEO Derek Pannell, and Barrick chairman Peter Munk: "Jack is more of a businessman, very financially orientated. Derek was an operator. Peter is a great statesman ... a great visionary."

Personal

Married in 1993. They have three children, all girls

Long-time board of directors of the SickKids Foundation

Director of the C.D. Howe Institute

______

IN HIS OWN WORDS

On speculation Barrick spun out its African unit as a first step to selling it: "We called it African Barrick Gold and I'm the chairman of it, so it's not like we are running from it ... if we were, we might have changed the name."

On ending the hedging program: "Hedging really built the foundation for Barrick ... but it wasn't needed any more."

On mergers and acquisitions: "When I look at what's out there, compared to what we've got, we don't need to chase anything."

On how to grow when your company is already huge: "You shouldn't expect us to go to a new country for a small asset where we can't see building out a platform for a bigger business."

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