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Sons of Gwalia's sharemarket credibility was put to the test again
yesterday when the embattled gold and tantalum producer revealed that its
managing director, Mark Cutifani, would step down in February.
But, unlike surprises that the company served up to the market earlier in the
year, the exit of Mr Cutifani did not cause any fresh share price damage, with
the stock closing steady yesterday at $2.48.
Analysts said that was because the market was comfortable that Mr Cutifani's
departure would not affect the group's operations because they were well
managed. Some expressed disappointment that there had not been some changes at
the board level.
Mr Cutifani, a former senior WMC mining executive, is moving to Toronto to
take up a position with the Canadian nickel giant Inco.
The Canadian group is looking to develop its prized Voisey's Bay nickel
project. It has also been rumoured as one of the groups that might one day make
a bid, probably on a joint basis, for WMC Resources, the nickel, copper and
fertiliser group created by the recent demerger of WMC.
While yesterday's steady share price performance for Sons of Gwalia brought
much relief to the board, the stock remains far below the more than $8-a-share
level prevailing at the start of the year.
The main share price damage was caused in October when the company revealed
that, despite previous assertions, demand in the world tantalum market which
Sons of Gwalia dominates had come under pressure. There was also confirmation
of operational difficulties within the gold division.
The problems meant that profit forecasts had to be slashed, sending the
group's share price tumbling to below $2 a share. The recent spike in the gold
price to more than $US340 ($607) an ounce has helped fuel a modest rally in the
share price.
Sons of Gwalia executive chairman Peter Lalor said he would fulfil Mr
Cutifani's duties pending the appointment of a replacement managing director.
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