Resolute announces departure of CEO, John Welborn, saying seeking operational improvement

John Welborn, former CEO, Resolute Mining

IN a surprise development, John Welborn has stepped down from Resolute Mining, the Sydney and London-listed mid-tier gold producer of which he was CEO for five years.

Stuart Gale, Resolute’s CFO and a former executive at Fortescue Metals Group, has been appointed interim CEO whilst a replacement for Welborn is sought.

Welborn was previously CEO of Equatorial Resources which was digging for iron ore in the Republic of Congo (RoC) before the collapse of the iron ore price.

“John has worked hard to reposition and transform the business over the past five years, and the time is right to introduce a new CEO to take Resolute forward, to deliver improvement in operational outcomes and resilience, and to deliver the next phase of sustainable value for the company,” said Resolute Chairman Martin Botha.

“The board is commencing a comprehensive process to recruit a new CEO with the skills and industry experience to lead the executive team and deliver on Resolute’s strategy,” the company said in a statement.

Shares in the company were 1% weaker on the Australian Stock Exchange.

The UK’s Berenberg Bank said Welborn was “a charismatic CEO who was passionate about the Resolute story”, but operational setbacks had placed pressure on the firm’s share price.

In September last year, the company reported a crack in the development of the Syama mine main roaster, its operation in Mali. The mine recovered quickly but Resolute nonetheless produced 384,731 ounces of gold for its 2019 financial year which was slightly below its 400,000 oz target.

In September, the company trimmed production guidance for 2020 to between 400,000 and 430,000 oz following a strike at Syama which could have been potentially worse after management said it had avoided a proposed 10-day strike.

On the positive side, Welborn took Resolute to a UK listing and has simplified the group structure as well as help tidy up the balance sheet. In June 2019 it bought the Mako Gold Mine from Toro Gold for $274m in cash and shares.

“Potentially, Mr Welborn’s departure may result in a delay to the updated Syama life-of-mine plan,” said Berenberg.

Last week, the company said results from resource drilling at Tabakoroni, a satellite deposit of Syama, had delivered 400,000 oz of gold in the last three years, demonstrated potential for one million additional oz in an underground extension of the open pit mine at an average grade of 4.5 grams/ton.

Were Resolute to approve the project, it calculated incurring life of mine capital of $118m and project capital of $86m.