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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (20159)	9/30/1998 8:55:00 PM
From: goldsnow	Respond to of 116764

INTERVIEW-Peter Munk No dedicated follower of fashion 03:44 p.m Sep 30, 1998 Eastern By Christopher Wilson TORONTO, Sept 30 (Reuters) - Canadian entrepreneur Peter Munk has always seen opportunity where others have seen ruin. It is a talent that helped him build Barrick Gold Corp. (ABX.TO) into one of the world's richest gold mining companies despite a decade and a half of languishing bullion prices. Now he has similar strategic ambitions for TrizecHahn Corp. (TZH.TO), his North American property company, which already owns some of continent's most prestigious real estate and is positioning itself for massive expansion in Europe. In a career in which he made and lost fortunes in such disparate industries as high-fidelity sound, hotels in the Middle East and oil exploration, Munk -- now 70 and probably a billionaire -- is the ultimate contrarian, selling on the trumpets and buying when there is blood on the streets. Undaunted by the tempests battering the global economy, Munk is not surprised at the near collapse of John Meriwether's brainy and seemingly invincible financial fund. Nor is he overly impressed with billionaire George Soros' recent dire warning that the world's financial system is ''coming apart at the seams.'' ''George was pitching the (United States) Congress to step in and help Russia,'' scoffed Munk. ''He was talking his book. He has billions of dollars of investments. If I had that I would also threaten and cajole and use all my power to persuade the Congress to step in there. Who wouldn't?'' Despite such cynical pronouncements -- and his own track record in business, which is full of superlatives -- there is nothing glib or overconfident about Munk. ''I don't expect that because somebody's brilliant or somebody's almost always right that that gives them a license of never being wrong. I mean that is what hubris is all about.'' Munk said in an interview with Reuters on Tuesday. ''Thank God I failed when I was young and it taught me the need to never make unilateral decisions. I do come up with strategic ideas, but I go through enormous effort to try to convince my colleagues. And I inevitably defer to the opinion of my colleagues if they are convinced I am wrong.'' Munk's ''colleagues'' include talented and carefully picked executives who run his gold and real estate interests. He also has an ''advisory board'' that includes former U.S. President George Bush, former Canadian Prime Minister Brian Mulroney and former German Bundesbank President Karl Otto Poehl. Munk places a high value on the ''checks and balances'' provided by such weighty advisers. But he has never been one to follow the herd. Four years ago, having built Barrick into a powerhouse in the gold mining industry, he shocked many in his own boardroom by deciding to pump hundreds of millions of dollars into prime North American office blocks. That was shortly after the Reichmanns' world-wide property empire had crumbled to dust and many thought real estate was a dead business. ''In 1994 to dedicate over half a billion U.S. cash -- which was big money in those days -- into a field that most people at that time perceived to be totally out of fashion in our decade, if not in our generation, was a hard sell,'' Munk acknowledged. ''But I have these strategic thoughts every decade. I went into gold in 1982...and if you recall gold went from $800 (an ounce) to $240. And everybody, whether they were chartists or fundamentalists, assumed that commodity was finished. How could you feel any other way when you see it collapse...in the space of a year?'' Through acquisitions of rich, low-cost producing gold mines and an innovative hedging programme that ensured premium prices above the spot bullion price over the past 10 years, Barrick has become one of the world's most valuable gold companies. It now has a market capitalisation of around $7.6 billion and generates the highest cash flow in the industry, at around $470 million a year. Its production in 1998 is estimated at just over 3 million ounces of gold, unchanged from last year. Munk believes his talent at spotting big strategic trends will pay off similarly at TrizecHahn and indeed property values have soared over the past two years. ''With Trizec, I did not believe that real estate would go out of fashion, just as I did not believe gold would go out of fashion,'' said Munk. Among the prestigious properties TrizecHahn already owns are Washington's Watergate building. The company has struck innovative leasing deals giving it effective ownership of Toronto's landmark CN Tower and Chicago's Sears Tower. Munk plans to use strong cash flow from TrizecHahn's North American properties to fund development of shopping malls and entertainment complexes in Europe. ''I believe the growth rate which the new Europe as a country will create in terms of person spending, (and) changes in personal lifestyles, will require a whole new range of real estate projects that we in North America can provide much better than the Europeans,'' he said. A Hungarian Jew who escaped his homeland for Switzerland and later Canada, Munk admits that he is more comfortable building business on the foundation of hard assets. ''Perhaps it has to do with my fundamental insecurity as a refugee, as an immigrant,'' he mused. ''I'm drawn, I find, to gold and real estate -- the kind of things that are not easily replaceable overnight. That gives an added feeling of security.'' Copyright 1998 Reuters Limited.