Ask Peter Munk, founder and former chairperson of Barrick Gold, whom he most admires in the mining industry, and you get a passionate, digressive response, along with a possible clue to the direction of the world’s largest gold producer.

“What Ivan Glasenberg has done equals an Olympic record,” Munk says in an interview, referring to the billionaire CEO of GlencoreXstrata. It was Glasenberg who led Glencore’s 2013 takeover of Xstrata, the biggest in mining. Munk, who is 86 and retired at Barrick’s annual shareholder meeting in last month, says he is good friends with the GlencoreXstrata boss and admires his ambition to compete with the biggest miners, such as Rio Tinto Group, BHP Billiton and Vale.

“He’s taken Xstrata, he’s now very close to the BHP Billitons, he’s going to eat them all,” Munk says.

Munk’s comments are being scrutinised particularly closely after failed merger talks between Barrick and Newmont Mining degenerated into a public dispute between the two miners.

Had it gone ahead, the merger would have been the kind of bold deal extolled by Barrick’s founder, combining the world’s two largest gold producers after the biggest slump in the market for the precious metals in 32 years.

For Munk, GlencoreXstrata’s Glasenberg represents the aggressive, buccaneering spirit that other large mining companies either have lost or never had. He says risk taking is essential to expand and survive in mining.

“The only way not to make a mistake is to try nothing, and then we would have disappeared like many other penny stock companies in the mining sector,” Munk says.

According to Barrick, the merged Barrick-Newmont would have been based in Toronto. That would have helped fulfill Munk’s ambition of creating a genuine Canadian national mining champion, after a decade in which some of its biggest domestic rivals were acquired by foreign buyers.

John Thornton, the man picked by Munk to replace him as chairperson, led Barrick in the negotiations and would have been executive chairperson of Barrick-Newmont, people with knowledge of the matter say.

A former president of Goldman Sachs, Thornton had never worked in mining until he joined Barrick two years ago. Since then, he has helped oversee its strategy and explored investment from China. He is open to a potential diversification into metals other than gold.

Barrick’s stock fell 46% last year in Toronto, outperforming the 49% decline in the 30-company Philadelphia Stock Exchange Gold and Silver Index. Gold dropped 28%.

Munk spoke on April 23 at Bloomberg's headquarters, five days before Barrick and Newmont reported that their merger talks had been terminated.

Dapperly dressed in a blue, chalk-stripe suit, he talked enthusiastically about Thornton, who was appointed cochairperson of the miner in June 2012.
“The leadership is what’s going to define if we are disappearing in the next ten years or going to a new plateau,” Munk said.

“Thornton was one of the few people who had the global experience, the global understanding, the record and the vision and all the qualities that I think a leader needs.”

While Munk has played an important role in Barrick’s key decisions over three decades, it is not clear yet whether Thornton will hold the same sway, says Jorge Beristain, an analyst at Deutsche Bank, in Greenwich, Connecticut.

“Historically, Barrick has had a pretty powerful position of the chairperson,” says Beristain. “What’s the mandate that Thornton will be given and how much runway will he have to continue pursuing his agenda?”

Munk says he sees no reason why Barrick cannot compete with the world’s largest mining companies. He cites Homestake Mining, a U.S. gold miner that Barrick acquired in 2001 for $2.4-billion.

“Fifty years ago, there was only one gold company that any American knew,” Munk says. “Where are they today? A subsidiary of ours.”

In contrast to Barrick, Australia’s BHP Billiton, the world’s largest mining company, is “bureaucratic”, he says. “Where is the ambition, the vision, the determination to win?” he asks. “Ivan has it.”

Ambition has defined Munk’s life and career. Born in Hungary in 1927, he escaped the Nazis as a teenager and arrived in Canada in 1948. His first fortune came from Clairtone Sound, the stereo and television manufacturer he founded and which eventually collapsed after Munk was ejected from management.
There followed hotel and commercial real estate businesses outside Canada. Munk returned and established Barrick, first as an oil and gas company, before switching to gold, an industry he knew little about. Barrick expanded relentlessly, doing at least 29 deals since 1994, according to data compiled by Bloomberg. It became the largest gold producer with its $10.2-billion hostile acquisition of Placer Dome in 2006, also the largest gold takeover.

Not everything has gone smoothly. Barrick struggled to turn around its delayed and overbudget Pascua-Lama project on the Chile-Argentina border, where costs ballooned from an estimated $3-billion in 2009 to as much as $8.5-billion in 2012. CEO Jamie Sokalsky finally announced the project’s suspension last year.

A Newmont deal has proved elusive – Munk says he sat down with then Newmont chairperson James Goldsmith two decades ago but failed to reach an accord. Several more doomed attempts at a deal followed.

There was also the C$7.1-billion ($6.5-billion) takeover of copper miner Equinox Minerals in 2011, an all-cash deal that Munk says was a mistake. Barrick wrote down more than $3-billion of its value within two years. But he is also unapologetic and says that while mistakes are inevitable, more deals are needed in the industry.

“When you are aggressive and you want to grow, you can’t prevent always not being once wrong,” he says.

Munk says part of the reason he wants Barrick to succeed is so that Canada has a company that can compete with the largest miners internationally. He is motivated by the disappearance of nickel producer Inco, which was acquired by Brazil’s Vale in 2007; Falconbridge, bought by Xstrata in 2005; and aluminium producer Alcan, acquired by Rio in 2007.

He says he hopes that sense of ambition will remain at the company after he hands over to Thornton.

“John Thornton, of all the people I know, will have the motivation, the vision, the qualifications, the record to carry on,” Munk says.