Molycorp shares dive as CEO quits and firm faces investigation
Shares of rare earth miner Molycorp Inc. (NYSE:MCP) were falling Thursday morning as the company’s president and chief executive, Mark Smith, left without explanation and the company revealed it was under investigation from the United States Securities and Exchange Commission (SEC).
The company’s stock was down 35 cents (3.1%) to $10.64 on the New York Stock Exchange at 11:08 AM EST.
According to the press release divulged Tuesday, Smith’s departure is not linked to the SEC probe. Molycorp said the company was at a natural turning point as it moved into production.
But Dahlman Rose analyst, Adam Graf, said Smith’s resignation was linked to the company’s poor performance and weakening market position, Reuters reports.
"Mr Smith's departure is tied to Molycorp's recent weaker-than-expected performance, driven in part by falling rare earth oxide price, but also by disappointing operating results, unexpected additional capital expenditures and aggressive acquisitions," he was quoted saying in an investor note.
Constantine Karayannopoulos, an engineer who sits as vice chairman of the Molycorp board, has become CEO on an interim basis. Karayannopoulos spent seven years as CEO of Neo Material Technologies, until Molycorp acquired that firm this year.
The search for a new leader puts Molycorp on the same boat than BHP Billiton (NYSE, ASX:BHP), Anglo American (LON:AAL), Barrick Gold NYSE, TSX:ABX) and Newmont Mining (NYSE:NEM), which are all also looking for fresh faces to head their executive teams.
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