After a horror year in which it recorded a $5.8 billion loss and came under investigation for possible breaches of corporate law, Newcrest Mining’s chairman and chief executive are leaving the company.
Chairman Don Mercer will retire in December after seven years in the job, and will be replaced by board member Peter Hay, who is also on the board of ANZ.
The gold miner also appointed former Rio Tinto aluminium executive Sandeep Biswas as its chief operating officer, with an eye to him succeeding chief executive Greg Robinson in the second half of 2014.
Newcrest, Australia’s largest gold producer, described the move as part of an orderly succession process.
Mr Mercer said Mr Robinson had “worked hard to protect the long term future of the company through this period, and whose strong values are an example to all”.
However the company has been under shareholder pressure to make changes since downgrading its production and making more than $6 billion in asset value writedowns.
Those moves were pre-empted by broker downgrades in June, prompting an investigation by the corporate regulator into possible breaches of disclosure laws.
Proxy advisers ISS released a report this week advising shareholders not to re-elect board members Richard Lee, Tim Poole and John Spark, who are on Newcrest’s audit committee, which is ultimately responsible for ensuring legal compliance.
The market reacted positively to Wednesday’s changes, with Newcrest’s share price rising 10 cents, or 0.9 per cent, to $10.93.
Its shares have more than halved in value in 2013.
Morningstar analyst Mathew Hodge said the company’s decisive action on executive changes was a positive.
While possible breaches of disclosure rules – which Newcrest has denied – are a bad look, more worrying has been its inability to meet production and cost control targets.
“There was plenty of angst in the market and plenty of people weren’t happy with what had happened … at least they haven’t mucked around,” Mr Hodge said.
Mr Hay said Newcrest was well positioned for the future, but in view of volatile market conditions, the board would continue to ensure it assessed all options to enhance shareholder value.
Newcrest has maintained its production guidance for the 2013/14 financial year, and said production for the September quarter was 586,573 ounces of gold.
