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Iamgold in search of new CEO as Stothart leaves

Construction at the Côté gold project in Ontario. (Image courtesy of IAMGOLD | YouTube.)

Canada’s Iamgold (TSX: IMG)(NYSE: IAG) is looking for a new chief executive officer as its current leader Gordon Stothart has stepped down and resigned from the board with immediate effect.

The Toronto-based gold miner, which gave no reason for Stothart’s departure, said chief financial officer Daniella Dimitrov would serve as chief executive on an interim basis.

Dimitrov, who joined Iamgold in March last year, was also appointed president.

Gordon Stothart (Source: IAMGOLD)

Stothart joined the company in 2007 as COO and became president and CEO in March 2020.

Chair Don Charter thanked Stothart for his time at the helm and credited him for “championing” the Côté Gold project in Ontario.

In a separate release, Iamgold announced the Canadian project — a 70/30 joint venture with Sumitomo Metal Mining — is 43.4% complete and on track to begin production in the second half of 2023, with an expected average production of 316,000 ounces of gold a year.

Earlier this month, Canada’s Nutrien (TSX, NYSE: NTR), the world’s largest potash producer, surprised the market by announcing its chief executive officer Mayo Schmidt had left the company and resigned from the board

Frequent leadership changes in a company can sometimes be a sign of instability or poor management, analysts say. Unexplained C-suite departures are even more concerning to investors, because of potential liabilities or scandals that could affect the stock price and the direction of the company.

Rosebel strategic review

Iamgold also unveiled on Wednesday it had kicked off a strategic review of its Rosebel gold mine in Suriname, which will require an investment in 2022 and 2023 to address certain challenges the operation has been experiencing over the last two years.

The company estimates Rosebel will require about $1.24 billion for the remaining 12 years of mine life. Additionally, it flagged a potential non-cash asset impairment charge on the asset. Iamgold has run into delays in stripping, strategic pit pushbacks as well as issues with maintenance and the completion of required infrastructure at Saramacca, a satellite for Rosebel.

The gold producer also announced a new life-of-mine plan (LOMP) for Rosebel, based on revised geological models and cost increases, saying it was conservatively constrained given the other capital requirements of the group at the present time.

The announced strategic review of Rosabel could mean either a sale of the asset or paring back capital and production, CIBC analysts wrote in a note to investors.

Shares in Iamgold dropped on the news in both the Toronto and New YorK stock exchanges. They were trading 5.11% down on the TSX to C$3.53 and 5.08% lower in NY to $2.80 a piece by mid-day. The miner’s market capitalization sits at C$1.71 billion ($1.37bn), after closing on Wednesday at C$3.60 and $2.76 respectively.