[miningmx.com] – MARK Wellesley-Wood has a way of attracting controversy, a legacy of having fought the iniquitous Kebble family in DRDGold, a corporate combat that extended to JCI and Randgold & Exploration.
Wellesley-Wood was not beyond criticism either during this period.
Miningmx reported in 2006 on an increase in Wellesley-Wood’s annual remuneration while at DRDGold to about R10m in that year, which included a R4.66m bonus, compared to a total package paid of R5m in the previous year. The share price performance of DRDGold hadn’t warranted the bonus, although Wellesley-Wood defended his position by saying he had saved the company.
In retrospect, Wellesley-Wood did save DRDGold, and kept the momentum in the stock going for quite a period with his enterprising marketing of the Roodepoort Rocket. Yet analysts still felt the bonus was excessive.
The question now is whether Wellesley-Wood is being asked to perform similar minor miracles at Mwana Africa, the UK-listed company of which he is the newly elected chairperson. It was this appointment that last week raised the ire of the respected UK analyst, John Meyer of SP Angel who said Wellesley-Wood was a negative development for Mwana Africa.
Kalaa Mpinga, CEO of Mwana Africa, told Miningmx the company was cutting its clothes to its cloth amid margin pressure, poor commodity prices, and diminishing cash reserves.
The company recently raised $3.2m from Chinese investors selling some 130 million shares, about 12% of the company. But it had also set about a cost-cutting and streamlining process which Mpinga hopes is one of the areas in which Wellesley-Wood will play a role.
“We needed someone who is a specialist. He also understands underground mining; he’s a disciplined and a tough person. He knows how to extract efficiencies and he understands the financial markets well,’ said Mpinga.
“I think we’ll be a good pair.’
The way SP Angel describes it in an update to Mwana Africa, and the appointment of Wellesley-Wood, the veteran miner “might just be the right man for the job’ as metaphorically speaking, Mwana Africa needs to have some drains unblocked.
“Makes us wonder if Mwana Africa are suffering some form of blockage from what we have heard, though we are not aware of any particular political issues affecting the company apart from having to work in Zimbabwe,’ said SP Angel.
Also helping matters is clarification Wellesley-Wood is drawing £60,000 a year as chairperson of Mwana, less than feared by SP Angel which had earlier lauded Mwana Africa for cutting Mpinga’s salary 25%, and those of board members 50% in an effort to see out the market doldrums.
Other measures are required in Mwana Africa, however, including outside financing in the form of equity investment in the Zimbabwe-listed nickel company, Bindura Nickel Corporation in which Mwana has a 76.5% stake.
Mpinga says it’s a capital drain although he remains confident that “. it will be turned to account sooner than people think’.
Broadly speaking, Mpinga is also weighing up whether Mwana Africa should be positioned as a project development or exploration company, or stay as a producer. It owns the Freda-Rebecca gold mine in Zimbabwe which it is expanding to 85,000 ounces a year by mid-2014, but it also owns the Zani Kodo gold prospect in the Congo which is also being expanded in scope. To produce gold or grow on the promise of production is Mpinga’s question.
“We are looking at every alternative. I don’t know if I have a clear answer yet as shareholders like the diversity. We have a good suite of assets,’ says Mpinga.
