It’s week three of 2010 and we are already into the CEO departure stakes, with two gone in three days this week alone.
Earlier in the week we saw Lihir CEO, Arthur Hood depart unexpectedly, yesterday it was the CEO of GrainCorp, Mark Irwin, who surprised with news of his immediate resignation.
GrainCorp gave no reason for Mr Irwin’s resignation in the statement.
Some media reports said it was believed that Mr Irwin, who served as chief executive at GrainCorp for less than two years, did not quit to go to another job.
GrainCorp (GNC) shares slumped more than 4% on the news, but they recovered a bit to end down 17c, or 2.7%, at $5.97.
What made the departure even more puzzling was the fact that GrainCorp reaffirmed its profit guidance provided to the market on December 22.
That predicted earnings before interest, tax, depreciation and amortisation in fiscal 2010 in the range of $180 million to $210 million, and grain receivals of 7 to 8.5 million tonnes.
On top of that the company is in the process of bedding down its biggest deal, the acquisition of the United Maltings business in Australia and around the globe.
That’s probably why GrainCorp said chief financial officer Ian Wilton would act as interim chief executive while it searches internationally for a replacement for Mr Irwin.
A GrainCorp spokesperson said the announcement of Mr Irwin’s resignation had "nothing to do with anything financial".
"There are no financial surprises or anything like that that has been uncovered, and there is nothing that relates to the acquisition of United Malt Holdings, the new malt business unit," the spokesman said.
"The board has accepted Mr Irwin’s resignation because they believe that is the best thing for the company, and the appointment of Mr Wilton as interim CEO places the company in a very solid pair of hands," AAP reported yesterday.
GrainCorp acquired the world’s fourth largest commercial malt manufacturer, United Malt Holdings (UMH), last October 2009 for $757 million.
Mr Wilton, who only joined GrainCorp in June 2009, played an important role in the acquisition of United Malt Holdings. It’s for that reason, it seems, that he was made interim CEO and could have a chance of becoming the new boss after the search ends.
Meanwhile two leading resource groups, Oz Minerals and Santos, produced mixed production reports yesterday.
OZ Minerals exceeded its full-year copper and gold production guidance, after what the miner described was a very successful first year at its Prominent Hill operation.
(It was also the year that it nearly wasn’t for OZ Minerals, which sold assets to avoid collapse.)
The company’s shares edged half a cent higher to end at $1.155
The company said fourth-quarter copper production jumped 29%.
Output was 36,497 tonnes in the December 31 three months.
That compares with 28,316 tonnes in the preceding quarter.
Full-year production was 96,310 tonnes, beating the company’s target of between 85,000 and 90,000 tonnes.
OZ Minerals produced 30,526 ounces of gold in the three months to December, taking the 2009 figure to 75,535 ounces.
Full-year gold production guidance had been 60,000 ounces to 70,000 ounces.
"This strong production performance was due to increased milling rates, good recoveries and high plant utilisation," the company said in the production statement.
Costs were competitive at 63.5 US cents per pound because of higher copper production, the high US dollar gold prices and stable production costs.
OZ says it sees production of 100,000 to 110,000 tonnes of copper and between 80,000 and 90,000 ounces of gold a year from 2010 to 2012.
The cost will be between 85 and 95 US cents per pound in 2010.
OZ Minerals also produced 339,937 ounces of silver in the fourth quarter, taking the full-year figure to 700,177 ounces.
The miner said it was studying the feasibility of underground mining at Prominent Hill, with preliminary findings indicating that the mining of the higher grade western copper resource should meet internal hurdles.
OZ Minerals signed a heads of agreement with IMX Resources late last year with the intention of forming a joint venture to explore copper and gold projects on IMX’s tenement in South Australia, which is adjacent to OZ Mineral’s South Australian tenements.
OZ Minerals will have a 51% interest in the joint venture.
The miner is also exploring opportunities in Cambodia, having completed a drilling program in the country’s northeast.
At of December 31, OZ Minerals had $US517.4 million ($A570 million) and $A497.2 million in cash for a total of about $A1.08 billion at the year end exchange rate of 89.34 US cents per Australian dollar.
Santos says its 2009 production of oil and gas was in line with guidance but sales revenue was hit by lower oil prices (and the impact of the stronger Australian dollar).
The company said in its 4th quarter production report yesterday that 2009 sales revenue of $2.181 billion
