TORONTO - Canadian mid-tier gold miner Iamgold Corp said on Monday that Chief Executive Joseph Conway has resigned effective Jan. 15 and will be replaced on a temporary basis by board member Peter C. Jones.
The surprise announcement had little impact on the company's shares, but analysts said it raised uncertainty about the company's future as it works to expand its production beyond 1 million ounces a year and develop its newly acquired Essakane gold project in Burkina Faso.
The announcement caught me a bit by surprise, said Barry Allan, analyst at Research Capital in Toronto.
In a statement, Conway said he and the board of directors had agreed it would be an appropriate time for me to step down as an executive of the company.
Conway joined the Iamgold in early 2003 and has overseen a number of acquisitions, most notably its C$1.3 billion ($1.25 billion) takeover of Canada's Cambior in 2006.
The Toronto-based company currently operates eight mines in the Americas and Africa. It expected production of about 950,000 ounces last year, and will add about 300,000 annual ounces when Essakane reaches commercial output in August.
The company's shares more than doubled last year due to soaring gold prices and improvements at Essakane and at the Rosebel mine in Suriname, but the stock traded largely sideways between 2002 and 2009, underperforming several like-sized peers.
Certainly they bulked up the ounces, but the value creation aspect was a little bit more difficult, Allan said.
For him to exit on an upbeat note, it's the right time probably, but it does create a fairly heavy degree of uncertainty there.
In a research note, Macquarie Equities Research analyst George Albino said the announcement was a negative for the company as Iamgold had shown improved performance in the past couple of years under Conway's leadership.
Without a permanent replacement ready for Mr. Conway, we believe the market will view this as a source of confusion regarding Iamgold's leadership and that the CEO's departure will weigh on the stock in the interim, Albino said.
The company's shares were up 19 Canadian cents at C$16.70 on the Toronto Stock Exchange on Monday, slightly underperforming other Canadian gold stocks.
Iamgold said it has appointed a committee to conduct a search for a permanent replacement.
Jones, who is not the same Peter Jones that recently stepped down as CEO of HudBay Minerals, was most recently president and chief operating officer of nickel miner Inco before it was bought by Brazil's Vale (VALE5.SA) in 2006.
($1=$1.04 Canadian) (Reporting by Cameron French; editing by Peter Galloway)