Peter Munk

"al instrument, with a Canadian government guarantee of both principal and interest. The complex international aspects of Munk’s NHA mortgage scheme required the input of an expert legal mind. Munk chose Howard L. Beck of the fast-rising Toronto law firm of Davies, Ward and Beck. Thus began an association that has seen Beck at Munk’s right hand in nearly every deal Munk has negotiated since then—with or without success."

"As Peter Munk rode to Columbus Street that fateful night, he knew nothing of these events. However, he was worried about the safety of his beloved mother, Katharina Adler, who had been divorced from Peter’s father, Louis, shortly after Peter was born. A few weeks earlier she had been ordered into the Nazi Budapest compound as a hostage. Peter was living with his father and stepmother, but he had gone to his mother’s apartment and carried her pitifully small valise as the two of them took a streetcar to the designated place. As Peter Munk tells the story: I took her into the Hungarian camp where she had been ordered to go. I was sixteen years old. I carried her bag because Grandmother was too frail to go with her. I promised her that I was going to look after her. I realize now that they could have taken me in with her in one second. But I thought that I could protect her. When the Munks, a month later, said they were going to leave Hungary together, I said, “I’m going to stay with my mother. You go.” But Grandfather said, “But youre the last male Munk! You cannot not go.” And I said, “Well, ’'m not going.” Then I actually talked on the telephone to my mother in the camp ... and, boy, do I remember this ... I talked with the camp commander personally. He said to me, Don’t worry, your"

"As the Munks had been making their way to the Columbus Street siding, the tall, strapping Erwin Schaeffer had been escorting his own parents to the Kasztner train. Former school friends, Erwin and Peter had not seen each other for some years. To avoid being apprehended by the Germans, Schaeffer had dyed his hair blond and made himself look like a Hungarian Nazi, even changing his name to Julius. That night Erwin was terrified that one of his old classmates would unwittingly reveal his identity. If Peter Munk acknowledged the identity of his Jewish friend, a watchful SS or Gestapo officer might have realized that Julius was actually a Jew. He would have been taken into custody immediately, and would probably have joined the four hundred thousand other Hungarian Jews who were sent to concentration camps that summer and exterminated. Peter Munk recognized Erwin Schaeffer in the brief moment when the two passed each other in the crowd of Jews struggling to get on the Kasztner train. But his friend’s appearance—blond hair, Gestapo raincoat—was so altered that Peter instantly understood that it was a disguise that could easily be destroyed by the wrong gesture or by words of greeting. Peter fought his natural impulse to embrace his dear friend and walked calmly away. It would be eight years before Peter and Erwin saw each other again."

"My SPP shares lost their value: first 30 percent, then another 30 percent, then another 30 percent. We went from HK$5.40 down to 60 cents. Secondly, the mortgagors for our various hotels, if they had a chance, called back their debts. It was just like the property boom and bust in Canada later, in the eighties. Everybody was panicking. My main supports were all based in England. My cash flow became very precarious because land sales at Pacific Harbour simply came to a halt, but once you start building a hotel and it’s three-quarters of the way finished you can’t stop. We had big hotel projects at Narita, the new airport in Japan, and in Auckland at the harbour; and a major shopping centre in the middle of our Fiji development. We couldn't stop any of it."

"Peter Munk and his family did eventually arrive in Switzerland. They owed their good fortune to two American agencies, the JDC and the War Refugee Board; to Rezsoe Kasztner’s dealings with Eichmann’s men; and to Saley Mayer, the Swiss representative of the JDC. By Executive Order No. 9417, signed January 22, 1944, President Roosevelt had created the War Refugee Board (WRB), whose mission was to organize and implement programs for the rescue, transportation, maintenance and relief of the victims of enemy oppression, and to establish havens of temporary refuge for such victims."

"As always, David Gilmour was essential to Munk and the Fiji project. He was doing his bit around the world and I was doing my bit at home. Without David, Fiji wouldn't have gone. My part was more the formulation and the strategy. David did the outside work; he was not a strategist. David sometimes heard more about the difficulties than I because I was more hardedge to deal with. I was very pushy and very aggressive. It was very important to me. I had really thought about every aspect of Fiji, I knew it could be done, and I was very impatient."

"Gutterson was one of the first Americans to attend the London School of Economics. He and his father and brother made fortunes in the late 1920s stock market boom. He remembers flying over to London, and throwing parties in the Waldorf Astoria in New York. Later he lost much of his fortune in the crash of ’29 but he still walked away with a million dollars. He bought Webber Pharmaceuticals in Canada, who specialized in vitamin E. His was a different mentality from the Munks’. The Guttersons were in love with the idea that the Munks were an old family, even though we had no money. At the wedding the rabbi made a speech about the"

"mother's a very special person, and I thought, Gee, the commander! My mother sits with the commander! My mother spoke to me then and said, “I want you to go with the Munks, and I don’t want any kind of nonsense from you. Just go.”"

"Every time there was a serious crisis Peter would phone at one or two o'clock in the morning, and wed talk for an hour. I didn’t tell him what to do because I didn’t know anything about the electronics business. But I said, “Look, there is simply no way that you have to lose this if you tackle it the right way. You have to find somebody who can help you financially.” Munk listened to Schaeffer very carefully. Schaeffer goes on: A couple of months later I learned, from the newspaper like everybody else, that Clairtone was going public. The rest is history. From there on it was up, up, up."

"One of the things Adnan Khashoggi was famous for in those days was his fabulous parties. Peter Munk suggested to his new partner that, in the interests of SPP, Khashoggi might consider holding parties in Australia and New Zealand. Agreement was enthusiastic and immediate. The first party was in Auckland, New Zealand, on the evening of Thursday, November 18, 1976. Adnan arrived in Auckland in his Boeing 727 with his companion, Laura Biancalini, while Essam Khashoggi flew in in his smaller DC9. Travelling with Adnan were Peter and Melanie Munk as well as David Gilmour and his London model friend, Jill Sweeny, all of whom were central to the Khashoggi bash at the Shoreline Cabaret, ‘Takapuna. Two hundred guests drank Australian bubbly, ate splendidly, were entertained by a Maori concert party and danced to one of the best bands on the island."

"The proceeds of the $130-million sale (after the assumption of all debts by the purchaser) went to the owner, Barrick Investments Limited, a Cayman corporation. Out of that substantial sum a dividend went to Triad and to Munk and his partners. That left more than $100 million to provide Barrick with an investment base. By this time Munk had decided to buy into natural resources in Canada and North America and, in particular, into oil and gas."

"What first attracted me to Peter was his focus. He was a very, very focused man, which is unusual in an entrepreneur. Usually, they’re all over the place, but here was a man whose mind was crystal clear. He was wonderful to work with because of his natural enthusiasm, and in intellect he was superior to anybody I’d ever met. Peter is blessed with both the mind of an engineer and the heart of a great entrepreneur. A very unusual combination."

"Munk set about getting all the basic pieces assembled in a credible form. By the time we went out to raise the money, we had Project Planning Associates working on the Master Plan, we had the Foundation Company of Canada for the civil engineering, we had American Airlines with landing rights, and a deal for our first hotel. We had the Fijian government. Believe me, I needed all that. Because when I first went down to Wood Gundy, the investment house, to raise the $4 million, they could hardly contain themselves laughing. They thought that Peter Munk must have lost his mind because of the setbacks. The last time they heard of me I was being fired from Clairtone and facing all the insider-trading publicity, and then suddenly I reappear as a resort developer in Fiji!"

"“Peter, I think that this is a brilliant move, but I just hope you understand what it means.” I said, “Of course. It’s going to make us the biggest industrialists in Canada, and eventually maybe in the world.” And David replied, “And it’s also going to make you the slave of every fourth-rate car dealer you have to suck up to when they’re signing up an order for the next model—which I have done for six years of selling Clairtone sets. It's not my idea of a good way to spend the rest of my life."

"The first strategic scheme, securitized mortgages, had enormous potential. Under Canada’s National Housing Act (NHA), the government guaranteed approved builders’ mortgages that paid an interest rate in the range of 8.5 to 9 percent. Munk recognized that European investors were highly attracted to securities that carried a Canadian government guarantee. Furthermore, the European market indicated that those investors would be prepared to buy in at a return equal or close to 6.5 percent, more in line with government bonds at the time. By offering lower-cost funds to Canadian builders, Munk could obtain the capitalized value of the 2-percent per annum cost differential, which amounted to 20 to 25 percent of the equity value of the projects financed under the arrangement. He could then offer part of that ownership interest to investors concerned with inflation as well as yield. It would be a unique, hybrid financial instrument, with a Canadian government guarantee of both principal and interest."

"he year 1968 was a crossroads in Peter Munk’s life. He spent the summer on his island in Georgian Bay. His fertile mind was busy putting together two elaborate schemes. One was a sophisticated international securitized mortgage-financing plan. The other was an off-the-wall development project in Fiji."

"Peter Munk doesn’t believe in leaving his family money. “I believe in leaving them a strong set of moral guidelines. I think that I was influenced by the fact that I saw my grandfather, at the age of seventy-four, kicked out of Hungary by the Nazis with only a knapsack. So to me that can happen again in a lifetime. If you've got the moral guidelines, the self-confidence and the determination, you'll start again and will make it. But if all you have is the money and the money is taken away from you, then you are finished.”"

"or five hours on the mountain with my guide or my wife or my friends or my family. I love the mountains. I love the challenge of skiing—I’m a bad athlete but I love it. It’s the best thing you can do with five of your kids and your wife and your friends and have fun all day. Klosters is the ideal lifestyle for me, just like in the summer | think my Georgian Bay island keeps my sanity and keeps m"

"a earlier for Consgold and later for the Trizec and Lac opportunities. It is his pattern of operation when he has made up his mind on any major acquisition or other strategic initiatives, but still needs to persuade and convince “his peo- ple.” On important issues it is required discipline to put the funda- mental reasoning plus all the risks, versus rewards, into a written form. It helps people to think about the proposal, and it can be used ye"

"Peter Munk was beginning to focus on something about which he really knew very lit- tle—gold mines. Bill Birchall was on Munk’s wavelength about gold. In 1981 and °82 he had spent time in Australia, where he looked at some gold mines, and he claims that he learned how to do a profit-and-loss of a gold mine on the back of an envelope. Peter Munk’s criteria for gold mines were all related to their potential. He and Birchall considered South Africa, and they looked at gold mining businesses in North America. They found only two sizable publicly quoted gold mining companies, Campbell Red Lake and Homestake Mining. Both had large market capitalizations in the range of a billion dollars and enor- mously high share price—earnings ratios. Munk and Birchall wondered why, if the price of gold was not going crazy, would a gold mining operation have such a high price— earnings ratio? The answer was very simple. There was a scarcity of major gold producers. There was a plethora of gold exploration firms in those days, but an institutional fund manager wouldn't invest in an exploration company, and if he wanted a share in a gold mining com- pany, he had a choice of two: Campbell Red Lake or Homestake."

"l"

"The first company pursued by Barrick in Indonesia was Bre-X. Two Barrick geologists, Larry Kornze and Paul Kavanagh (who later joined Bre-X as a director for his geological expertise), visited the Busang site in October 1993. Drilling had begun just days earlier. Kornze and Kavanagh recommended that Barrick begin discussions with Bre-X, and their company did so. In November 1993, Bre-X chief David Walsh proposed a deal to Barrick, involving money to finance exploration by Bre-X, whose shares were selling for pennies. But the proposal didn’t fly. Bre-X really didn’t want to dance with Barrick, at least not on Barrick’s terms, which included Munk’s unalterable principle that down the line he had the right to assume control of Busang."

"I made a pitch to all my guys. They called me back and they said, “God, it’s a great thing. Let’s go!” It was simple to acquire Trizec, because we had over half a billion U.S. dollars in the bank then, in cash. I wanted to go into something where we would be a major, more than just a bit player. And I wanted to do something that was in the bottom of the cycle. Trizec had those characteristics. We could negotiate it without a fight. Trizec had a major franchise value. It was a dominant player in the real estate field and I could get control. Trizec was one of five or six big decisions in my life, in my business career. But those decisions do not get implemented until all of us—management and directors—sign off on it. Our job is to make an unassailable case."

"Time, in business, is a function of how much money you have and how soon you run out of the ability to write a cheque. So we said, let us all, the handful of key executives, take the minimum amount of salary. Let us make sure that we don’t spend our money—giving us the time to prove our principles. When the company’s value moved from $80 million to $3 billion last year to close to $4 billion today, I received my share. I am proud of having done that and I’m thrilled that there was $3 billion out there that was earned by institutions, by investors, by people who believed in us. In the process, close to 2,000 jobs have been created, and stockbrokers and truck makers, mine suppliers and contractors have all benefited as we built facilities, as we expanded our activities from Kirkland Lake in Northern Ontario down to Utah and over to Nevada. And it is just misleading, in my mind, for some to have represented these exercised options as an annual salary—but it's not their fault; it is the reporting system that adds bonuses, salaries and options together to show an executive's total annual remuneration. But this is not, of course, an annual salary, but that’s the impression the public gets. I, as a"

"The disintegration of the Soviet Union, combined with apparent return of East Germany to democracy and to capitalism, stirred the strategic as well as the emotional fires in Peter Munk’s European soul. As he puts it, “Geopolitical events bring with them major economic changes—and that’s the time to make big money.” He immediately understood that there would be opportunities to restore Berlin to its prewar grandeur, and to do so profitably. Another possibility was to acquire and develop lands close to and within the social and economic orbit of Berlin."

"The goal would be to convert 100 of these to minimarts and give a general facelift to all retail locations. The team wasted no time in getting into action. Then, in July, Peter Munk negotiated refinancing of Clark Oil, by raising $300 million selling first-mortgage notes through Drexel Burnham Lambert, a major New York financial house."

"The plan had been to have Barrick acquire a 4.9-percent share block in Consgold. Barrick could then move to acquire control, sell at a profit, or—the real objective—use the block as leverage to get Consgold to sell its two North American mines, Mesquite and Chimney, to Barrick. That objective was on the verge of being reached after discussions between Munk and Rudolf Agnew, Consgold’s chairman. But the price of Consgold shares moved beyond making financial sense, driven so high by the inappropriate Capel intervention that Barrick could no longer compete. Peter Munk does not tolerate being deceived by anyone—let alone professionals whom he has retained to advise and act for him, and who betray his trust. The James Capel Consgold activities were completely unacceptable. It was time to sue."

"The first phase was becoming the predominant gold producer in North America, which I think we have achieved. We had narrow limits, narrow focus, and a highly specific set of objectives. We didn’t move outside the geography. We had a fixed program. We didn’t borrow money. We have achieved that, maybe a bit better than what I was initially hoping for, with luck."

"When we went public in ’72, the market went berserk. The shares just kept on going up. That’s when I got frightened that the market was way ahead of the value. And I said to my part- ners, “I created this, I conceived this, but you know there’s reality and then there are dreams. This is not reality.” The company was worth US$20 million, but on the Hong Kong market SPP was worth $100 million! Our shares went from $2.50 to $6. Jardine’s David Newbigging, one of my directors in SPP, gave a lunch for me. After lunch Newbigging, whom | adore, talked with me. He was a big shot, the Zaipan. He shut the door and said, “You know, Peter, Jardine’s going to have a fantastic year, because we sold much of our own SPP shares at a great profit, all because of your effort. Have you sold any shares?” I said, “Me? It’s my company.” He said, “I don’t give a damn, Peter, whose company it is. You cannot afford not to sell. You're a rich man on paper—you must also have some in cash.” I said, “I’m not a rich man, but I own a quarter of this company.” He said, “Peter, I’m older than you are. I’m wiser than you are. Please. The market is boiling. The demand is enormous. The market is still open for another hour. Why don't you take two million dollars’ worth of shares and put it in your bank?” I"

"It was time for Peter Munk to write one of his memos to colleagues. Munk wrote similar memoranda earlier for Consgold and later for the Trizec and Lac opportunities. It is his pattern of operation when he has made up his mind on any major acquisition or other strategic initiatives, but still needs to persuade and convince “his people.” On important issues it is required discipline to put the fundamental reasoning plus all the risks, versus rewards, into a written form. It helps people to think about the proposal, and it can be used years after the deal to review the thinking and check the assumptions."

"He's not a patient person. Once he’s sorted out what he wants to do he wants it yesterday. And that, some days, has to be a problem. It takes him a while to get comfortable with somebody. But once he does it’s an open book. He listens. A lot of business people that I know on the boards that I sit on are so insecure that they’re not able to delegate, for whatever reason, whether they're afraid that if they delegate somebody'll become too strong and take over, or it'll be perceived as a sign of weakness. Peter delegates, he trusts his people, and he’s very careful. He has insecurities. I mean there’s no question."

"Just before Christmas 1987 Tony Novelly arrived at Peter Munk’s Hazelton Avenue offices to announce that Novelly’s Apex Oil Company, his holding company for Clark Oil, was in serious trouble. Apex, based in St. Louis, was one of the largest private companies in the U.S., with 1987 revenues over US$2.5 billion. It also owned, with Clark, two refineries in the Midwest with a combined capacity of 160,000 barrels per day, and 960 gas service stations. Novelly had joined Munk’s Barrick Resources board in 1984 and was a strong investor, with more than half a million American Barrick shares in his portfolio. He told Peter Munk that Apex had just defaulted on its loans and was in receivership. Novelly pleaded with Munk to have Horsham take over Apex. He asked Munk to be one of the bidders when the bankruptcy was adjudicated for the whole Apex structure. “Because the banks need my release ... otherwise I’ll sue them,” Novelly said, “If you do it my way, you will have a very strong advantage because I won’ give the release to anybody else. In return I want a participation with you.”"

"As a prelude to the reorganization, Munk had successfully completed, in September, a deal with Merrill Lynch Canada Inc. for the sale of C$43 million worth of units of American Barrick’s common shares and gold purchase warrants. Each unit offered consisted of one common share and two warrants to purchase gold at US$460 an ounce. For those who had faith (or were prepared to bet) that the price of gold would rise beyond US$460 by September four years later, the enticement was complete. Merrill Lynch had no trouble selling them."

"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."

"232 GOLDEN PHOENIX de-watering coal projects over there and we'll get the job done.” He didn’t question our decision. Peter just said, “Go and do it.”"

"During the remainder of 1987, Munk focused on raising capital for American Barrick Resources. He left the mining development to Bob Smith and his professionals. Munk and Gilmour, with their expert number-cruncher partner, Bill Birchall, would orchestrate the money mining."

"Peter Munk’s dealing in Barrick’s gold interests, holdings and subsidiaries was becoming increasingly complex and sophisticated as a result of the interrelated Camflo holdings. Everything had to be simplified for investors to easily understand. By the end of 1986 articles in the press on Munk included charts to enable readers to track Munk’s holdings and interests."

"A stand-alone takeover bid would require some £1.8 billion, and as Munk says: With a bid of that magnitude a mistake would be fatal, and I could not take a chance. At the last minute, we had advances from the Oppenheimers through third parties for me to go to South Africa and talk. I was afraid to compromise our legal position and didn’t accept. And by that time I had promised Rudolf Agnew that I would not engage in a dialogue with the Oppenheimers."

"226 GOLDEN PHOENIX blue-chip firms of the London Stock Exchange. Consgold had two gold mining properties in North America that Munk wanted to acquire, Mesquite in Nevada and Chimney in California, but he had to make his play against Consgold itself in order to give himself some leverage whereby he could wedge out of Consgold those two target mines. Before he could make his Consgold move, Munk had to obtain the support of his board. He wrote a five-page memorandum which he distributed to them. That was followed by meetings and telephone board meetings. In the end he convinced his people and his directors, and the run at Consgold began."

"Munk needed a tried-and-true gold mining operator in his search for producing mines with potential for increased production and reserves. And Bob Smith was it."

"But with something critical and big, like going private, like changing your ten-year program, like buying the hotels or buying out Khashoggi or going out of petroleum and into gold, all those strategic ideas are mine. I usually come back from Klosters with written proposals. I write and then at night I rewrite, because I get very excited so I write badly and I have to rewrite it ten times. Then I circulate my concept, my proposition, to the five or six people I need to convince. Then I bring them together and I give them my arguments. I don’t take any of those major steps unless I convince my colleagues and have their full concurrence. If I can’t convince them, and if they argue their opposition well, I abandon my plan."

"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."

"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!"

"The first action was the open-market purchase by Barrick of 4.9 percent of Consgold. Rudolf Agnew, the CEO of Consgold, perceived the potential of a Munk takeover bid, and was threatened because he thought that was what it was. Agnew made immediate contact with Munk. The two men met on January 13, and discussed the promising possibilities of Consgold’s two mines in North America—Mesquite and Chimney. At that time, the Oppenheimer family of South Africa were the largest single shareholders of Consgold, with about 30 percent of its stock. Under British law Munk couldn’t talk to or deal with the Oppenheimers. It would disqualify Barrick from bidding as a “concert party bid."

"In February 1985 Peter Munk had announced his strategic goal for Barrick Resources: in three years its mines would be producing 300,000 ounces of gold a year. In 1984 the production was 34,000 ounces. As 1985 closed out, Peter Munk was beginning to maximize the leverage that only ownership of the gold reserves of producing mines could bring. He borrowed (at 2-percent interest) 77,000 ounces of gold against Mercur’s reserves. He then sold that bullion on the open market for US$25 million. Those funds were used to pay off the total short-term debt to the Bank of America, leaving only $8 million in long-term debt for the Mercur acquisition."

"The massive financing requirements for Goldstrike would come in 1989, but with the gold reserves that were coming onstream at that little mine, gold-secured loans promised to meet all requirements. To begin the Goldstrike financing Peter Munk went to Oliver Baring of the London financial house Warburg Securities at the beginning of September. He retained Warburg to assist Barrick in its negotiation of financing terms and evaluation of alternatives, including the preparation of the information memorandum or any other aspect of the transaction."

"With that series of transactions closed, Peter Munk and Barrick Resources were in the gold mining business with all the leverage for the raising of capital that the magical lustre of gold can excite in the minds of potential investors. Peter Munk’s aim was clear: he was not in the gold exploration business—he was in the market only for goldproducing companies already in operation and located in North America. His next move was, however, slightly out of line with that stated policy. In September, as the Renabie merger was being completed, he signed a joint venture deal in which Barrick Resources, with a 23-percent interest, and three other companies financed a stake in a potential gold mine in the farthest northern reaches of the United States, at Valdez Creek in Alaska. Valdez Creek began to produce gold in August 1984."

"Munk got his money on December 31, 1984 (he was skiing on the mountains of Klosters). From the proceeds the Gold Company of America advanced to Barrick US$40 million (C$53 million) against Barrick’s commitment to deliver to the Gold Company of America each year a number of ounces of gold that varied with the price of gold. For example, in 1984 the price was US$365, against which Barrick delivered 8,767 ounces. That package produced C$53 million, which was used to pay the Royal Bank debt. In January 1985, Munk sold the Camflo energy holdings for $32 million. With the initial private placement of $30 million made before the finalization of the Camflo merger, the total of $114 million was more than enough to take out the Royal Bank debt. It was a remarkable achievement by any standard, starting with Peter Munk’s practically door-to-door effort for the private placement; he claims to have approached at least fifty potential investors to raise that key first $30 million. Without it there would have been no Camflo merger."

"On Smith's advice, Munk put in a bid. When it turned out to be close to but lower than Exxon’s, who came in at about $60 million, Munk withdrew. But then Exxon backed off and departed. Munk lowballed with a bid of US$31 million with a sweetener: Texaco would get half of any proceeds should gold go over US$385 an ounce, topping out at US$9 million. Texaco took Munk’s offer. The next step was to finance the deal. Munk’s recent feat of paying off the Royal’s $100-million Camflo debt gave him new credibility. The Continental Bank Company gave Munk an equity loan of US$31 million. With the funds already in hand, Barrick closed the Mercur deal in June 1985."

"unk’s strategic thinking shifted into high gear. As his inves| \ / tigation and research progressed, he became convinced that even with its mountain of debt Camflo would bring new credibility to Barrick Resources. The key factor was that Camflo was producing gold in significant quantities, and had acknowledged and reputable management under Bob Smith, whereas the Renabie production was only 16,000 ounces in 1984. Munk needed gold production against which he could obtain major financing."

"200 GOLDEN PHOENIX clippings, whatever is important. I have breakfast at eight in the morning and my Swiss secretary brings in all the faxes. I have my coffee and I go through: it all, and I give her dictation or instructions and reply to the faxes. Then I leave to go up the mountain for skiing at nine or nine-thirty."

"That's my life in Switzerland. I don’t have to use a car. I spend four or five hours on the mountain with my guide or my wife or my friends or my family. I love the mountains. I love the challenge of skiing—I’m a bad athlete but I love it. It’s the best thing you can do with five of your kids and your wife and your friends and have fun all day. Klosters is the ideal lifestyle for me, just like in the summer | think my Georgian Bay island keeps my sanity and keeps my mind and my focus, enables me to live with the pressures."

"It seemed that there were very few good investment opportunities in mines already producing gold. Munk and Birchall did, however, find a role model: Echo Bay, a new North American gold mining company in operation in the Northwest Territories. It had good reserves, and its management intended to acquire additional production facilities: it also had institutional investors, because the mine was in production creating gold bars. So Echo Bay became the initial model for Barrick Gold."

"The Mercur mine in Utah was Munk’s next acquisition target, and Bob Smith was front and centre in the decision to go for it. Mercur was owned by Texaco, but had originally been developed by the mining arm of Getty Oil Company. With permission from Texaco White Plains’ senior executive, Peter Byur (later Texaco’s chairman and CEO), Munk sent his newly acquired Camflo team of mining engineers to do a two-day appraisal of Mercur. Bob Smith, the chief, took two of his Camflo geologists with him, Brian Meikle, a McGill graduate, and Alan Hill, a former Noranda mine manager. Smith and his team liked what they saw. Mercur was producing 70,000 ounces a year, but Smith reported that production could be increased dramatically, that the base cost per ounce could be lowered just as dramatically, and that he could run the mine much more efficiently."

"So I made a deal with Milt Mackenzie, we put up our money—$60 million—and Swede took over as president. And it was an unmitigated, total, complete and irredeemable disaster. It was one of the biggest, the swiftest and, possibly because of that, the least painful of my disasters."

"Munk had three inflexible rules: first, capital had to come in as equity, because debt was unacceptable; second, he had to keep operational control of the enterprise, even if he and Gilmour had less than 50 percent of the voting shares; third, he would not risk the assets of SPP’s Fiji development or of Travelodge for the Egyptian development. There would be no cross-pledging of these assets to support the financing of the SPP (Middle East) contract in Egypt."

"The back-in-Canada chairman and CEO of Horsham, Peter Munk, was keen to buy into the oil and gas industry. He had $100 million of Barrick Investments’ money burning a hole in his pocket, and he just had to get going. After looking at countless deals in Canada and the United States, Munk and his team found the ideal candidate. Viking Petroleum, an Oklahoma producer, met all his requirements: it had producing wells; it was cash short; and it had experienced, capable management. Since none of Munk’s Horsham group knew anything about the oil and gas business, they had to buy a company run by experts who were already in place and had a great track record."

"It was during this same summer that Munk and Gilmour first met the famous Saudi Arabian entrepreneur, the billionaire Adnan Khashoggi and his brother Essam."

"During the summer of 1971—as he had done every year since 1958—Peter Munk spent a month on the still primitively outfitted Georgian Bay island where, with friends, he relaxed, played, sailed, fished and, as always, thought about the future. That focused corporate planning would crystallize in one of Peter Munk’s best years ever 1972."

"ust after the Haw Par—King Fung deal was closed in March 1972, Peter Munk had already laid out a strategic objective for the new SPP. The shares of King Fung/SPP had become enormously overvalued. So unless some substance was added to the company, its shares were vulnerable to a correction in market price. Peter Munk’s urgent goal was to increase the real asset base and underlying value of SPP of Hong Kong, so he had to buy assets that were undervalued with SPP’s paper. Munk’s attention now focused on Travelodge Australia Ltd. (TAL), an Australian hotel chain, the largest in the region, that was in a tourist-related business somewhat like that of SPP. It owned and operated hotels across Australia, New Zealand, Fiji, and in many South Pacific islands and nations. Travelodge expanded too fast. They were the biggest hotel operators in the Pacific and the fourth or fifth largest Australian company. They were expanding into New Guinea, into Tahiti, into Japan, and they just ran out of money. Their shares went down from $5 to the $1.50 range."

"irchall describes Munk’s business principles: be as conservative with your finances as the good Lord can make you and do not be greedy; always share the pie; there’s only one way you can ultimately go broke and that is by not being in a position to pay somebody to whom you owe money. So pay and don’t owe."

"After Clairtone, Peter Munk would not do a deal unless he had control of the operation—even if he did not have the required 50percent-plus shares. That was the situation with Fiji and it is the situation with his business ventures now, in the mid-1990s. Birchall explains the Fiji control arrangements: Control has always been achieved on an equitable basis. So far as initial SPP was concerned, when we got the original funding from Slater Walker, Peter and David probably had about 35 percent of the company. And, let’s say, Slater Walker another 25. It was also understood that Slater Walker was going to sell off to other institutions like P & O and the rest. So the objective there was always going to be that Peter and David would not have a large-percentage shareholding but they would have control. I was responsible for preparing monthly management. statements that were sent to all"

"Munk decided that with the move to London he would separate his and Gilmour's activities on behalf of Pacific Harbour from the direct supply of services to the development company. As he told his shareholders, “a management company was formed under my chairmanship to provide management services to our group of companies.” The key word was group. Corporations in the Munk supervisory group were Canadian, Bahamian, British and Fijian. Undoubtedly, there would be others to be formed as the needs of Munk and Gilmour's entrepreneurial activities might dictate."

"Munk preferred to create strategies, persuade, sell, and build corporate values. And, above all, to think and conceptualize."

"Peter Munk explains the interrelationship between the Swiss— Canadian proposal and the Fiji development project: I said to David, “Whichever gets financed first, we'll go with. An idea is good only if it’s financeable. ’'m going to work my guts out in both of them, but within eighteen months, I’ve got to have a job, I’ve got to work and not just promote. So whatever comes first, the other will get thrown out.” Fiji got financed first, because of Gilmour's contacts. So we dropped Swiss—Canadian and focused totally on the Fiji proposal. The concept of securitized mortgages, especially with government guarantees, was exciting, but it was just too difficult to get an underwriting. Also, Roberto Gancia was very rich, so for him the pressure was less."

"explains the Munk scheme in short form. The meeting was to ... discuss a number of aspects of the proposal of Mr. Munk to form a vehicle which would offer N.H.A. mortgages to European nationals for investment. In short, Mr. Munk’s idea is to sell interests in N.H.A. mortgages which are guaranteed by the Government of Canada to European investors at a rate of return equal to 6.5%. In addition, the European investor would obtain a portion of the equity of the Canadian borrower which for the first $20,000,000 raised in Europe would be approximately 20% of the borrower's equity position."