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Kinross Gold Corp. (K-T) ousted chief executive Tye Burt and replaced him with its executive vice-president of corporate development as Canada's third-largest gold miner contends with a slumping share price.
J. Paul Rollinson will take the top job and replace Burt on the board of directors, effective immediately.
Kinross shares are down nearly 47 percent in the last year, with the stock closing at $8.01 on Wednesday, before the management change was announced.
Kinross thanked Burt for his seven years as head of the miner and listed a number of notable achievements during his tenure, including a "significant upgrade" of assets, and a "substantial increase in gold resources and production."
But, the miner also said its board had determined that a change in leadership was essential.
"...Board has determined that in view of current market and industry fundamentals, stakeholder interests will best be served by an executive management team focusing on the implementation and oversight of the comprehensive capital and project optimization process that was announced by the Company on January 16, 2012," it said in a statement.
In May, Barry Allan, senior mining analyst at Mackie Research, predicted there was a 50-percent chance that Burt wouldn't be sitting in the corner office by next year.
"This goes back to a legacy of acquisitions that we've seen executed by the current management group, which sit there on the shelf and have not demonstrated bottom line performance," he told BNN. "I go back to the acquisition of Aurelian and the property in Ecuador, which sits there in debate with the Ecuadoran government and more recently it's the benefits the market is seeing from the Red Back acquisition in West Africa -- both have not delivered the goods."
In 2008, Kinross Gold bought Aurelian Resources for about $1.2 billion, taking control of the Fruta del Norte deposit in Ecuador, which is expected to hold around 6.8 million ounces of gold and 9.1 million ounces of silver. Many analysts questioned the move at the time, citing the country's volatile political landscape.
Recently the Ecuadorian government has been negotiating royalty payments with Kinross over its mines in the country.
And in January, Kinross announced a delay of six to nine months at its Tasiast mine in the west African country of Mauritania. Kinross acquired the mine in August of 2010 when it bought Red Back Mining for $7.1 billion. At the time, many observers said the deal was "fraught with uncertainty" and expensive.
Burt adamantly defended the acquisition.
"From our perspective with the technical work we're standing on -- which is boots on the ground for six months, geologists, technical people, engineers, outside engineering consultants -- we have a different view than the Street," Burt told BNN at the time. "We have a more informed view of value in this thing."
Kinross chairman John Oliver said Rollinson is the right person for the role due to his combination of experience and reputation.
"Based on his education and related mining and investment banking industry experience, Paul understands all facets of the mining industry, including exploration and mining, mining finance and mining transactions. He is highly regarded and well-known throughout the industry, and possesses the leadership qualities we need to oversee and implement our strategy," Oliver said in a statement.
The news comes just months after Barrick Gold ousted chief executive Aaron Regent, citing its poor share performance as the main reason for the change.
- will files from Brady Yauch, BNN.ca staff