THE proposed resignation of CEO, Terence Goodlace, effective from December, has placed another layer of uncertainty on Impala Platinum (Implats).
The company is faced with refinancing some R2.5bn in corporate bonds which are due to mature in 2018 whilst questions have also been asked about whether it can deliver on its strategy to raise output at its Rustenburg mines, a necessity in order to reduce costs.
Implats’ plan is to raise production at Rustenburg, also known as the Lease Area, to a maximum of 830,000 ounces of platinum by the 2020 financial year from about 575,000 oz achieved in its 2015 financial year.
However, there’s been falls of ground and a fire in the complex since then, with ramp-up targets having been moderated as a consequence.
“The key risk to Implats achieving its Rustenburg Lease plan lies not in the numbers/targets themselves, but execution of project ramp-up and operational delivery,” said Christopher Nicholson, an analyst for RMB Morgan Stanley in a note dated June 3.
A “CEO overhang” provided further uncertainty and “… a lack of a clear succession plan in place”, said Nicholson.
Bernard Swanepoel, a former CEO of Harmony Gold and Village Main Reef, and a current non-executive director on the Implats’ board, laughed off Miningmx suggestions earlier this month that he might take Goodlace’s post.
As a result of falls of ground, production target worries, and now the CEO overhang, the valuation gap in Implats’ share price against the sector has narrowed, also partly informed by the improvement in the share prices of Implats’ peer group such as Anglo American Platinum, analysts say.
