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 remains “achievable.”
Pardey helped build the company’s Sukari mine, Egypt’s largest gold operation. The asset’s performance over the last two years, however, has disappointed investors.
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 2017, 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, 18 years after becoming managing director.
Like Pardey, El-Raghy will remain 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 of £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.