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Neal Froneman quits Uranium One
Allan Seccombe
Posted: Thu, 21 Feb 2008
[miningmx.com] -- NEAL Froneman, the chief executive of Uranium One, the company he founded, has resigned with immediate effect because of rising tensions in the company due to missed production targets and the long hours it's taken to build the company.
Uranium One's shares hit a day low of R40, a fall of 23%, with triple the normal volumes traded in the company on the JSE. The market capitalisation of the company fell some R5.5bn in little over an hour.
Froneman is replaced by executive vice president of business development Jean Nortier who fills the CEO position on an interim basis.
"The issue of Dominion raised a lot of tensions internally and it's not nice when an operations doesn't function optimally. You not only have to deal with staff working longer hours, but you also have the difficulties of the promises you made to the market," Nortier told
Miningmx.
"Neal's decision was very quick otherwise we would have put in place a proper succession plan. It was a pretty big surprise," he said.
A trader said: "It's not just the news of Neal leaving, but also their new lower production forecast which is driving the share price down."
Dominion, the uranium mine in South Africa, has revised its 2008 uranium production target down to 590,000 pounds from a targeted two million pounds as the ramp-up profile changed for the operation, Nortier said.
Slower-than-expected development rates at Dominion, lower grades on the slimes dams that were being retreated and more leaching of near-surface uranium resources than first thought are behind the lower forecast.
Uranium One produced two million pounds of U3O8 from its Kazakhstan and South African operations in 2007.
The company revised downwards its 2008 forecast by 32% to 3.15 million lb and for 2009 down by 15% from the previous guidance to 6.8 million lb.
In October 2007, Uranium One shares took a thorough beating from investors when it revised its production targets down by 37% for 2008 to 4.6 million lb because of problems in Kazakhstan and South Africa.
Nortier will meet the Uranium One board in the United States early next week.
Froneman will remain as CEO of Aflease Gold, a subsidiary of Uranium
One.
"Neal worked really hard over five years building this business. The profile of the business is now changing from one of external growth to a lot more focus on operational issues," Nortier said.
Froneman was not pushed by any of the company's shareholders, he added.
Nortier was unable to say if his position would be made permanent and that would be an issue discussed at the meeting with the board next week.
"In the mean time I will execute the short-term mandate I've been given by the board on keeping the team focused and motivated. In terms of our goals, nothing's changed," he said.
Ian Telfer, Uranium One's chairman, said: "I look foward to working with Jean as he leads the company through the next stage in its development."
Uranium One has appointed former AngloGold Ashanti chief operating officer David Hodgson as acting chief operating officer. He had been serving as a non-executive director since
2006.
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