5th Jan 2024 10:46
(Alliance News) - Endeavour Mining PLC late Thursday announced the sudden termination of its chief executive, sending the gold miner's stock lower, though installing an experienced executive in his place for now should soothe some investor fear.
Endeavour shares plunged 11% to 1,503.00 pence each in London on Friday morning.
Endeavour, with assets in nations including Senegal and Burkina Faso, on Thursday said it ousted Chief Executive Sebastien de Montessus for "serious misconduct" and with immediate effect.
The move followed an investigation into an irregular payment instruction issued by him in relation to an asset disposal undertaken by the company.
The irregular payment instruction amounted to USD5.9 million and was discovered in the course of a review of acquisitions and disposals, which is ongoing.
De Montessus responded to the allegations, saying in 2021 he had instructed a creditor to "offset an amount owed to the company to pay for essential security equipment to protect our partners and employees in a conflict zone".
This had "no additional cost to the company" and "did not benefit [him] personally in any way", he maintained.
However, de Montessus conceded that omitting to inform the board of the arrangement was "a lapse in judgement".
Separately, in October 2023 allegations were made against de Montessus through the company's confidential whistleblowing channel relating to his personal conduct with colleagues.
Following a recent external investigation, the board had received the findings and, at the point of termination, said it was considering the appropriate course of action.
De Montessus added: "This week I was given 48 hours' notice of the concerns and no proper opportunity to answer them. As to the other investigation: no misconduct of any kind was discovered because none occurred. I am proud of what we have built together at Endeavour over the past 8 years. I will take my time to consider my position with my advisers."
Despite the "unexpected news", analysts at Stifel believe Endeavour's operational outlook should not be affected.
"The irregular payment instruction and conduct allegations appear to be isolated incidents so, while some headline risk remains as further details emerge, operational and financial performance should be unaffected," Stifel said.
Ian Cockerill, currently deputy chair, has been appointed chief executive officer & executive director with immediate effect.
Endeavour said Cockerill has "50 years of experience in the global natural resources industry". He was formerly CEO of Johannesburg-listed Gold Fields Ltd. He also currently sits on the BHP Group Ltd board as an independent non-executive director.
Stifel analysts added: "While the change adds some uncertainty regarding the longer-term leadership of the company, the instillation of an experienced mining executive familiar with the assets suggests that a strategic shift of any kind is highly unlikely in the near term."
By Eric Cunha, Alliance News news editor
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