Barrick chair says he ‘never’ planned to use Hannam for Randgold merger

Barrick Gold (NYSE: GOLD, TSX: ABX) chairman John Thornton told the High Court in London on Monday that he “never” planned to appoint veteran commodities dealmaker Ian Hannam to advise on the deal to acquire Africa-focused gold producer Randgold.

Hannam & Partners (H&P), Hannam’s boutique investment firm, is suing Randgold Resources for up to $18 million, claiming fees for its role in the 2018 merger. The deal resulted in the creation of the world’s largest gold miner at the time.

As reported by the Financial Times, Thornton stated that while he valued Hannam’s input on the merger—seeing “very little downside” in consulting him—he had always planned to work with Wall Street dealmaker Michael Klein.

Hannam testified that he was “shocked” to see Klein’s firm named in the announcement of the merger without any mention of H&P.

Hannam, a former top rainmaker at JPMorgan and nicknamed the “king of mining,” is renowned for brokering high-profile deals in the resource sector, including the 2001 merger of BHP Billiton and the 2012 merger of Glencore and Xstrata.

“The Barrick-Randgold merger has been hugely successful,” said Matthew Hardwick, H&P’s lawyer, during the trial’s opening last week, FT reported. “But for Ian Hannam’s vision, it would not have happened.”

Thornton acknowledged in his witness statement that Hannam’s close relationship with Randgold founder Mark Bristow made it useful to keep communication open.

The Financial Times reported that Thornton said he knew that he was never going to appoint Mr. Hannam,

“Because I favored and had access to Michael Klein, with whom I had been close for many years,” Thornton said, adding that “Klein was always going to be Barrick’s adviser in connection with the Randgold merger so long as I was involved.”

Thornton further stated, “I did not need Ian Hannam’s help to do a merger.” Barrick’s legal team argued that there was “no written evidence” of any agreement obligating them to pay fees to H&P.

After the Barrick-Randgold merger, Klein continued advising Barrick, including on an unsuccessful $18 billion attempt to acquire Newmont.