London - Tanzania-focused miner African Barrick Gold pinned its turnaround hopes on a new chief executive on Wednesday, appointing industry veteran Bradley A Gordon to replace Greg Hawkins at the helm of the struggling group.
The FTSE 250 company, whose poor performance meant it was under pressure even before a gold price rout began in April, said Gordon's appointment would be effective immediately.
Gordon, who has worked in the gold mining industry for 30 years, was previously CEO of Intrepid Mines, the Canadian and Australian listed precious metals exploration and development company with primary operations in Indonesia.
Analysts welcomed the change, and said Gordon's his lack of African experience was balanced by his ability to manage difficult operations.
“The announcement should be well received by the market given the long history of under-delivery by previous management since the IPO in 2010,” Canaccord analysts said.
Illegal mining, power generation problems and strikes forced African Barrick to warn in February that output would shrink for a fifth straight year. It started an operational review in the the wake of a failed attempt by its parent company Barrick Gold to sell it.
The steepest gold price falls in a generation added impetus to the review and the company said in July it had identified $185 million of savings as it slumped to a loss.
Shares in African Barrick, which have lost around two-thirds percent of their value over the last 12 months, were trading down 1 percent at 154 pence, well below the company's 575 pence listing price when it was spun-out of Barrick in 2010.
African Barrick is one of many precious miners battling to turn a profit in a lower gold price environment. The price of gold has fallen over 20 percent so far this year prompting many producers to shelve projects, reduce overheads and put non-core assets on the block.
“The board is confident that Brad's experience and track record in generating shareholder value, combined with his strong appreciation of community and employees, make him the right person to lead the company at this pivotal time,” African Barrick's chairman Kelvin Dushnisky said in a statement. -Reuters