Jolly gold giant

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holes in the ground; the interests of shareholders came a distant second. Mr Munk looks rueful when describing this “cultural divide” and the synergies that a merger between two of Canada’s biggest miners, INCO and Falconbridge, could have brought. The thought of a good deal left undone clearly pains him. He blames the “fraternity” that existed between Canada’s miners for deadening competitive instincts. His regret turns to irritation that both Canadian firms have since fallen to foreign mining firms. Despite his Hungarian roots, Mr Munk is a proud Canadian.

Mr Munk had little experience of mining when Barrick started out, but he knew how “Wall Street paper shufflers” operated, and shuffled some paper himself. Barrick was a firm that “lived by acquisition”, expanding first in Canada and then in 1994 venturing abroad for Lac Minerals, with mines in America and Chile. The last big buy, of Canada’s Placer Dome for $10 billion in 2006, made Barrick the world’s biggest gold miner. Takeovers require steady cashflows, which in turn depend on the gold price. So Barrick introduced a hedging scheme, novel to gold mining, that involved selling future production at a fixed price. Mr Munk was thus able to neutralise the risk of a falling gold price to fund acquisitions and capital-intensive projects. These hedges were largely unwound before the gold price began its rapid ascent, causing Barrick’s share price to rise sharply in the past year along with the gold price.

Barrick may yet consider more big acquisitions—though with gold hovering just below $1,000 an ounce, potential targets are off-puttingly expensive.