Goldstrike

"It was small but it was very interesting. I remember Brian Meikle saying, “Here are these seven thousand acres. If you stood on this piece of ground, on one side is Newmont’s big Genesis mine producing about 4 million ounces, and 180 degrees up the valley there is the Bootstrap and Dee mines, producing probably another 2 million ounces of gold.” Goldstrike was a little “Ma and Pa” organization running on a shoestring with a lot of haywire, but they were making reasonable money at it. I talked to Joe Rotman and said, “Joe, if we could buy Western States would you be willing to sell your halfe” and he said, “Sure.” And that’s when I went to Peter and said, “Let’s take a crack at this.”"

"Peter Munk had never seen the gold mine he fought so hard to buy. His decision to go for it was based on his faith and trust in his mining team. As soon as the deal was closed, Munk says, Bob Smith went out with his people, Dr. Meikle and Alan Hill. They started to drill and they became very excited. They wouldnt’ tell me how excited they were because I don’t know anything about drill holes. At the point Barrick took over Camflo, Bob and his people had little credibility. There was nothing but friction at Camflo. So I had to learn by experience, and my confidence in them grew over the years as they performed and I realized how brilliant they were, and how much integrity they had. But at that time, if they had said to me that we had a billion-dollar mine there in Goldstrike, believe me, I would have run for the hills!"

"That, to me, was a very great promise. In the middle of this Consgold turmoil, which lasted almost a year, we made several million pounds on the transaction because, as we kept buying, the attendant publicity suddenly focused on Consgold as a takeover target. In fact, the Oppenheimers themselves then subsequently made a bid for more Consgold stock. The move on Consgold promised to give Munk much-needed mines, which “I would get later on by buying Goldstrike, but at that time I needed the next step.” A week after Munk met with Agnew, Bill Birchall received word that Hill Samuel was interested in buying all or any part of Barrick’s 5-percent shareholdings in Consgold. That useful information was of great comfort to Peter Munk, whose Consgold play had driven the market value of Barrick’s 4.9-percent holding up by over $10 million and rising. That would mean a tidy profit on an investment made but a few months earlier."

"At breakfast in Klosters on the morning of December 20, Peter Munk reviewed with great satisfaction the fax that had arrived from his financial people, Jerry Garbutt and Greg Wilkins, on the matter of Goldstrike development financing. Munk’s team recommended that, of the two banks submitting offers—the Toronto-Dominion Group and the Union Bank of Switzerland Group—the lead mandate be awarded to the UBS group, which offered US$441 million secured against 1,050,000 ounces of gold over eight years, extendable to eleven years. There it was, a commitment for US$441 million, which, according to Bob Smith, would turn the little mine called Goldstrike into North America’s top gold producer."