July 19 (Bloomberg) -- Avocet Mining Plc Chief Executive Officer Brett Richards said he has resigned after running the Burkina Faso-focused gold producer for two years. He will be replaced by David Cather.
“I have decided to resign as the chief executive officer of Avocet Mining to pursue other opportunities, effective immediately,” Richards said in an e-mail today.
Avocet has plunged 55 percent in London trading since the end of June, when the company cut its annual gold production target and said costs would increase. The company lowered its 2012 output guidance to 135,000 ounces to 140,000 ounces from an earlier target of 160,000 ounces because of a shortage of mining equipment and lower-than-expected gold grades at its Inata mine.
Cather joined Avocet as chief operating officer in May, the company said in a later statement. Richards took over as CEO in June 2010, replacing Jonathan Henry.
“My major focus is going to be on the Inata operation,” Cather said in a telephone interview today. “There are opportunities to radically improve the operation. There is going to be a rich harvest of opportunities to improve the performance of Inata.”
Cather said Avocet would target 140,000 ounces of gold this year, at the top of its guidance range, and that the company would be strengthening its management team starting with a new general manager at the Inata mine.
“The operational disappointments and disastrous share price led to some market dissatisfaction,” Numis Securities Ltd. said in a note to investors. “Given it appeared that Avocet has struggled to get a handle on the Inata operation, Cather’s promotion appears sensible to mitigate this.”
Avocet rose 2 percent to 70.60 pence by the close in London trading, paring its drop this year to 62 percent.
“The decision to appoint Mr Cather highlights an operational focus which we expect will be taken well by the market,” Liberum Capital Ltd. said in a note today. “Avocet is now a turnaround story.”
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