Shares in Egypt-focused gold miner Centamin (LON:CEY) (TSX:CEE) fell on Thursday more than 15% to 105.65 in London after it announced that its chief executive, Andrew Pardey, would leave the company following a year of operational challenges.
Pardey, who joined the company 12 years ago as general manager, will stay at the post for a year, while Centamin looks for a new boss.
The company also warned that
production for the first nine months of 2019 is expected to be between 331,000
and 332,000 ounces. While lower than what originally expected, the company said
the lower end of its full-year guidance range of 490,000 ounces of gold remained
“achievable”.
Pardey helped building the company’s Sukari mine, Egypt’s largest gold operation. The asset’s performance in the last two years, however, has disappointed investors.
Andrew Pardey helped building the company’s Sukari mine, Egypt’s largest gold operation.
Sukari, which began operations in
January 2010, comprises a large open pit and an underground
mine. Last year, the company worked on operational improvements on
both sections, but they took longer than planned to materialize.
As a result, Sukari churned out 472,418
ounces of gold in 2018, down from 544,658 ounces in the year before, and Centamin
has struggled to boost production at its flagship mine this year.
The company began the year
with some
key board changes by announcing Josef El-Raghy had moved from
executive chairman to chairman, 16 years after becoming managing director.
As Pardey, El-Raghy has remained
linked to the company while the search for a successor continues.
As part of the board reshuffle,
Centamin has also appointed three independent non-executive directors, one of
whom will become non-executive chair in 2020.
Following those changes, the
Centamin board will consist of eight members, with two executive and
six-non-executives. Of the non-executives, five are independent.
The miner’s shares were down 12% by
mid-afternoon in London at 110p, leaving it with a market capitalisation is
£1.28 billion. The price drop is the highest since July and takes
the stock dangerously near to their second worst performance this year.
In February, the stock price hit the lowest in six years after Centamin said 2019 production would be well below analysts’ expectations.