Barrick Gold Corp. is losing its long-serving, number two executive, with the world’s biggest gold company seemingly blindsided by his departure.
After a 16-year run at Barrick, Kelvin Dushnisky is leaving his role as president, to become chief executive of South African gold major, AngloGold Ashanti Ltd.
His departure comes at a time when Barrick is struggling with a dwindling reserve base, locked in a geopolitical standoff in Tanzania and grappling with a flat gold price.
Barrick did not announce a successor for Mr. Dushnisky on Monday, saying it will name one in “due course.”
“The uncertainty surrounding the change in senior management could weigh on Barrick’s shares,” wrote RBC Dominion Securities Inc. analyst Stephen Walker in a note to clients on Monday.
Shares in Barrick, which are down 13 per cent this year, fell by 4.3 per cent Monday to close at $15.54 apiece on the Toronto Stock Exchange.
A lawyer by training, Mr. Dushnisky, 55, joined Barrick in 2002, as director of regulatory affairs, having previously held management positions at EuroZinc Mining and Sutton Resources. He slowly rose through Barrick’s ranks and was appointed co-president in 2014, alongside Jim Gowans. In 2015, he was named sole president after Mr. Gowans left.
“Nobody is as good at relationship building,” Mr. Gowans said in an interview on Monday.
In a release on Monday, Barrick’s executive chairman, John Thornton praised Mr. Dushnisky for his efforts in building “enduring, trust-based relationships” with governments, communities and shareholders. At annual general meetings, it was Mr. Dushnisky, not Mr. Thornton, for example, who took sometimes-irate questions directly from shareholders. Mr. Dushnisky also predominantly interacted with analysts in question-and-answer sessions during quarterly conference calls.
Yet, despite his senior position with Barrick, Mr. Dushnisky was significantly below Mr. Thornton in Barrick’s hierarchy and some say that caused tension. Shortly after he joined the management team in 2014, Mr. Thornton eliminated the CEO position, after the departure of Jamie Sokalsky, and effectively consolidated himself in the number one position of power. Mr. Thornton is known to make all of the major decisions within Barrick, including cutting deals to sell various non-core mines over the past few years, and the forging of strategic alliances with, for example, the Chinese to look at teaming up on acquisitions, or building new mines. Mr. Thornton is also the highest earner at Barrick, by far, making $7.7-million last year. Mr. Dushnisky, by comparison, earned $4.2-million.
Mr. Gowans, who is now CEO of Arizona Mining, remembers the co-president role as a “stressful” job for both of them back in 2014, under Mr. Thornton, especially as Barrick was struggling under an enormous US$15-billion debt load, in the aftermath of halting construction on a massive mine in South America.
Unlike at Barrick, at AngloGold Ashanti, Mr. Dushnisky will be in the top executive position and able to put his stamp firmly on the company.
“He needs a new challenge, and this is a good one,” Mr. Gowans said.
AngloGold Ashanti, is the third-biggest gold company in the world by production, operating 14 mines in 10 countries. It produced 3.8 million ounces of gold last year, with only U.S. miner Newmont Mining and Toronto-based Barrick producing more.
Mr. Dushnisky will encounter some of the same challenges he faced at Barrick when he joins AngloGold. The company’s share price, like Barrick’s, is trading materially below levels it traded at in 2011, at the pinnacle of the last great gold bull market. And Anglogold, much like Barrick, has seen its gold reserves fall significantly over the past five years or so.
Mr. Dushnisky officially takes over the CEO job on Sept. 1, replacing Srinivasan Venkatakrishnan, who is leaving AngloGold for London-based Vedanta Resources.
With the impending departure of Mr. Dushnisky, attention is now turning to who will replace him and whether Barrick will tap an internal candidate.
When asked in an interview 12 days ago, if she’d be interested in the role of president, if it became available, Catherine Raw, chief financial officer of Barrick, replied that the question was irrelevant, because she had “no expectation of Kelvin stepping down.”
However, she added that she had been “learning a lot” from working alongside Mr. Dushnisky.
“It’s fascinating for me, especially from a government-relations perspective, just how you deal with these complex situations.”
Barrick reports it second-quarter financial results Wednesday after the close. Analysts will be looking for any headway the company may have made in its negotiations with the Tanzanian government. Barrick’s subsidiary, Acacia Mining PLC, has been under a gold concentrates export ban since March of last year. Tanzania accused Acacia of defrauding it out of US$200-billion in taxes. Barrick is negotiating with Tanzania on behalf of Acacia’s management.