Skip to main content

Peter Munk was sailing in the Mediterranean Monday as news broke that the mining company he built had struck a massive deal to become the world's second-biggest gold producer.

People close to the 73 year old say the Barrick Gold Corp. chairman was kept informed throughout the negotiations with Homestake Mining Co., Barrick's partner in the $2.2-billion (U.S.) transaction.

"Peter Munk is wholeheartedly behind this," said Randall Oliphant, the 41-year-old chief executive officer who led the Barrick side during the two weeks of intense talks.

Story continues below advertisement

"Peter was in Europe last week; we were in regular contact and we work as a team," said Mr. Oliphant, interviewed alongside Jack Thompson, the chairman and CEO of Homestake.

It is a measure of Mr. Munk's elder statesman status - and his immense wealth - that he didn't interrupt a sailing holiday to spearhead the merger talks.

But the Homestake deal must feel satisfying, even from a distance. It contains an element of vindication for a man whose career has been a string of comebacks.

Only six months ago, he appeared to many observers to be a beaten man. During a December conference call regarding TrizecHahn Corp., his biggest holding, the Hungarian-born entrepreneur launched into an apology to shareholders for the abysmal stock performance of the real estate company.

"I take full responsibility for producing this miserable result," Mr. Munk said.

At Barrick's annual meeting in May, he was defensive about the mining company's $1.1-billion after-tax writedown in the fourth quarter, reflecting low gold prices and amounts that Barrick had paid for certain properties.

Now Barrick, which he founded 20 years ago, has pulled off the biggest deal of its life. Although Mr. Munk now owns less than 1 per cent of the company, he feels a parental bond.

Story continues below advertisement

"Barrick is something he founded and created, and he is emotionally attached to it," said someone who knows him well.

Under the deal, which amounts to a Barrick takeover of Walnut Creek, Calif.-based Homestake, Mr. Munk remains chairman and Mr. Thompson will be vice-chairman of the combined company, which retains the Barrick name.

Mr. Munk's career is a picaresque tale of bold action, dramatic reversal and an ability to pick himself off the floor. He has an un-Canadian penchant for shrugging off failure.

He combines this with often unblinking candour. He once devoted part of an annual meeting to praising the economic policies of former Chilean dictator General Augusto Pinochet, a man who had become a lightning rod for protest against human rights violations.

In a letter to the editor in The Globe and Mail, Mr. Munk later said that "what I did not convey was my abhorrence of any abuse of human rights that occurred during [General Pinochet's]regime."

Mr. Munk pointed out in the letter that his mother was an Auschwitz survivor, and "I personally escaped from Nazi terror in 1944."

Story continues below advertisement

As a teenager, he fled from Hungary to Switzerland, then emigrated to Canada in 1948 to study electrical engineering at the University of Toronto.

His first big venture was Clairtone, which he and a partner founded in the late 1950s to build stereos and televisions. Clairtone, which moved to Nova Scotia, became a case study in the futile handout of public incentives for regional development.

In 1968, after 10 years, Mr. Munk, at 40, was forced out of Clairtone by the Nova Scotia government, and the company later collapsed.

There followed a period of wandering in the wilderness. Mr. Munk struck out on development projects in Fiji and near Egypt's pyramids. (One of his partners in Egypt was arms dealer Adnan Khashoggi.) He returned to Canada in 1979, and lost heavily in oil and gas investments.

He found his feet again when he moved into gold mining in the mid-1980s. In the summer of 1994, he pulled off two key deals - takeovers of gold miner Lac Minerals Ltd. and developer Trizec Corp., which had fallen on hard times.

Barrick was also part of the feeding frenzy around Bre-X Minerals Ltd.'s reportedly massive Indonesian gold properties. It lost to a U.S. rival, but the Bre-X find was later revealed to be a worthless fraud.

Story continues below advertisement

Mr. Munk has made it clear that he was not amassing a legacy to pass on to his five children from two marriages. None of his family is heavily involved in the companies.

Son Anthony, a vice-president in Gerald Schwartz's holding company, Onex Corp., sits on his father's boards but appears to prefer the buyout game to managing the family holdings.

"I'd be quite surprised if Anthony took over," said Donald Rumball, a Toronto author and Munk biographer.

"It's very hard when you've been off on your own to go back to the family fold," said a source close to both Anthony and Peter Munk.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter