Live by the hedge, die by the hedge

By Terry Weber
The Globe and Mail, Toronto
Online Edition
Wednesday, February 12, 2003

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Barrick Gold Corp., stung by production problems and a
flagging stock price, said Wednesday it is replacing its
top executive in an effort to address quot;concernsquot; over its
recent performance and restore the firm's previous
financial lustre.

The move means Randall Oliphant, among Canada's highest-
profile executives, will leave Barrick's chief executive
post immediately.

He is being replaced by 47-year-old Gregory Wilkins,
who has been with Barrick and related companies
for about 20 years.

quot;The board has made the change to address its
concerns over the company's recent performance
and to restore Barrick to the leadership position in
the gold industry it has consistently maintained
throughout much of its existence,quot; Barrick said in
a statement.

Barrick, the world's second-biggest gold producer,
has been on the business end of several setbacks
recently, starting last year with production problems
at four mines that triggered a profit warning.

News of the production cuts and the lowered earnings
guidance came just weeks after Barrick's September
announcement of an ambitious $2-billion (U.S.) mine
development program aimed at doubling profits by 2006.

It was subsequently hit with an anti-trust lawsuit in the
United States -- Barrick has launched a libel suit over
those allegations -- and became involved in an income
tax dispute in Peru.

Concerns about Barrick's hedge book had also held
back the company's stock early this year despite one
of the most impressive gold rallies in recent years. In
late January, Mr. Oliphant had said the share price was
reacting to misconceptions about gold hedging and
would improve as investors grew more familiar with
Barrick's growth plans.

Barrick shares were down 73 cents (Canadian) or 1.6
percent to $24.52 in Toronto by 12:51 p.m. EST. The
stock's 52-week high sits at $36.05, while the
corresponding low is $21.30.

Mr. Oliphant joined Barrick in 1987 and was appointed
president and CEO in 1999.

BMO Nesbitt Burns analyst Geoff Stanley said in a research
note that the move quot;may ultimately help repair the market's
perceptionquot; but it also raises other questions.

quot;Although the company's release indicated that tonight's
earnings release will be in line with previous guidance,
we are concerned that this move signals that the
turnaround in operations and management that has been
necessary has not occurred as rapidly as hoped,quot; he said.

Barrick's fourth-quarter results are due later Wednesday.

quot;The entire board takes great pleasure in Greg's
appointment,quot; Barrick chairman Peter Munk said in a
statement announcing Wednesday's executive switch.

quot;He was a key member of the team, from the very
beginning, that built Barrick and we have total confidence
in his ability to lead the company at what is a very exciting
time for gold producers.quot;

Mr. Wilkins began his career at Barrick in 1981, working
closing with founder and chairman Mr. Munk and former
president and chief operating officer Bob Smith
quot;throughout the period that Barrick grew to be a leader
in the gold industry,quot; the company said.

In 1993, Mr. Wilkins left his post as chief financial officer
of Barrick to take over as president and chief operating
officer of Horsham Corp., which was then controlling
shareholder of Barrick.

Horsham later became TrizecHahn Corp. with Mr. Wilkins
remaining as president and chief operating officer until its
recent conversion into a real estate investment trust,
which resulted in the company relocating to the United
States.

quot;I am pleased to rejoin Barrick in my new capacity and
look forward to working with former colleagues and the
many new members of the Barrick team who have
become integral to its operations,quot; Mr. Wilkins said in
a statement.

quot;It is an exciting time in the gold industry and I intend to
refocus the company on the core values which served
it so well in the past.quot;

* * *

By Joe Schneider

Toronto, Feb. 12 (Bloomberg) -- Barrick Gold Corp.,
the world's third-biggest gold producer, fired Chief
Executive Randall Oliphant after the company's stock
fell as the price of gold surged to a six-year high.

Toronto-based Barrick replaced Oliphant with Gregory
Wilkins, who worked for Barrick from 1981 to 1993, when
he resigned as chief financial officer. The 47-year-old
Wilkins has been a director for the past 12 years.

Barrick's strategy of pre-selling some of its gold
production to protect against falling prices left it unable
to benefit as much as rivals such as Goldcorp Inc.
when bullion soared. Oliphant was one of the executives
who pioneered the hedging program.

quot;The big question is whether this signals a change in
strategy,quot; said Kevin Nyysola, who runs the C$270
million ($177 million) Investors Canadian Natural
Resource Fund at Investors Group Inc., which holds
Barrick shares. quot;Replacing one person with another
and not doing anything with the hedge book isn't going
to get the stock price moving.quot;

Barrick shares fell 13 percent in the past year, while
Goldcorp and Gold Fields Ltd., which don't sell their
metal before it's mined, rose 40 percent and 12
percent, respectively.