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6 Magma Newmont Mining celebrated its fiftieth anniversary in 1971. That was the year that astronauts rode a rover on the moon and the microprocessor was invented. It was also the year that gold was set free from government price controls. In August, President Richard Nixon, faced with a rising trade deficit and declining dollar, “closed the gold window” by repudiating the country’s international obligation to exchange dollars for gold. Subject to free market forces, the price of gold jumped in three years from $35 an ounce to $195. It was a defining moment for gold producers, but there was no mention of it in Newmont’s annual report that year. The reason was quite simple; Newmont considered gold as part of its past, not its future. In a thumbnail sketch of its history, Newmont’s annual report for 1971 cited an “initial phase (under founder William Boyce Thompson) ending in about 1933; the gold mining phase, ending about 1939; the African phase following World War II, which merged gradually into the recent growth phase that began in the early 1950s.” But growth in what? Presumably, any mining venture the company might choose. What the company did say was that its past strategy, however changing, had been rewarding. The purchase of 100 shares for $4,000 in Newmont’s initial public offering in 1925 would by February 1972 have been worth $140,000 and yield $4,500 a year in dividends. Five years later, in the annual report for 1976, shareholders were given a first, although incomplete, breakdown of the company’s earnings. With net income of nearly $50 million, 38 percent came from copper, 16 percent from gold (including by-­ product gold from its base metal mines), 8 percent from ferroalloys and lithium, 7 percent from oil and gas, and 2 percent from uranium. No accounting was made for the remaining 29 percent, although the cement business was profitable that year and the company recorded a $13 million profit on security sales. Full disclosure was not yet in vogue. 92 chapter six That year, to further CEO Plato Malozemoff’s quest for diversification, the company put together a consortium to acquire Peabody Coal, the largest coal miner in the United States. As a result, by 1980, Newmont was­ describing itself in its annual report as “a diversified natural resource company ” with subsidiaries and affiliates producing “28 products from mines, wells, plants and refineries in the United States, Canada and elsewhere around the world.” It attributed its “strength” to investments in “mineral properties having long life, low operating costs and ready markets.” However, Joseph Flannery, chief executive of Uniroyal Holding, who joined the board in 1982 and served for twenty-­ one years, found all the talk of a diversified portfolio so much window dressing. Throughout that period, he says, “The company considered itself a copper company and all the rest was a sideshow.”1 Carlin got very little mention in the board meetings. The emphasis was on Magma, which was going through a horrid time. Indeed, no company has been more closely associated with Newmont over the years than Magma Copper. Although Newmont did not add Magma shares to its portfolio until 1928, the two companies had been joined at the hip since their founding by Colonel Thompson. Except for a brief spat in 1950, they had shared overlapping officers and directors and continued to share offices in New York even after Newmont moved to the Pan Am (now Met Life) Building at 200 Park Avenue in 1983. In the early 1960s, when Newmont held a 21 percent interest in Magma but did not manage its operations, three of Magma’s seven directors were Newmonters . Roy Bonebrake, Newmont’s general counsel, was Magma’s chairman; Malozemoff was a Magma director and vice president; and Walter Schmid, Newmont’s controller, was Magma’s treasurer and a director. In 1964­ Magma’s president, Wesley P. Goss, joined the Newmont board. A 1922 engineering graduate from the University of California, Berke­ ley, Goss had a sixty-­ year association with Newmont, starting at Grass Valley , California. In 1953, he succeeded A. J. McNab as president of Magma, where he shouldered responsibility for the company’s growth for the next eighteen years and then served as chairman from 1972 until 1984. His son, John W. Goss, described as a humble man who had to work twice as hard as others to advance under his father’s tutelage, became general manager at San Manuel in...

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