Gold Fields faces an uncertain future after the resignation of its CEO, Chris Griffith – only a year-and-a-half into the role – and after the recent departure of several of its executives.
Gold Fields said yesterday that Griffith’s resignation was his decision as he felt responsible after the failure of the Yamana deal.
Griffith, 57, who was appointed CEO in April, 2021 plans to leave on December 31.
In a call to journalists yesterday, Gold Fields chairman Yunus Suleman said Griffith had approached the board and said that he intended to leave the company.
Martin Preece, who is currently running Gold Fields’s South Deep Mine, has been appointed as interim CEO.
“He felt responsible for the failure of the Yamana deal, and he approached us that he would like to depart. It was a mutually agreed understanding,” Suleman said.
According to Suleman, there was no difference of opinion that had taken place that led to Griffith quitting.
He said: “We have always been aligned in terms of the strategy.”
Griffith’s resignation comes in the wake of Gold Fields’s $5 billion (R87.5bn) failed bid to acquire Canadian miner Yamana Gold, thwarting the company’s growth strategy.
“We are all disappointed that the Yamana deal didn’t go through. We felt that it was a compelling deal and would have created value and a strong company for all our shareholders.
“There was a competing bid, obviously the deal was terminated. I think as the CEO, he felt that it didn’t go through, and he felt the responsibility, then he decided that he should depart from the company,” Suleman said.
He said in terms of the transaction, everyone was aligned.
“We all take responsibility where it landed, but in this case the personal responsibility of the CEO we need to respect,” he said.
Suleman said Gold Fields was meeting with global executives to search for a new CEO, where both internal and external candidates would be considered.
“Appointing a CEO of a global mining company does take a bit longer. The last exercise took us between nine and 12 months, so this is something difficult to anticipate, depending on the number of candidates coming through,” he said.
In terms of the company’s strategy, Suleman said it was not going to change.
“We are going to still pursue our growth strategy, and that will continue in the responsibility of the new interim CEO. There is no need for any change in that, and I think in terms of the executive committee members who resigned, that was a while ago. We don’t think there will be any gaps filled between now and the end of March,” he said.
The company has lost two-thirds of its executive team in the past two months.
Preece thanked the board for the confidence it had in him, and for the opportunity.
“I look forward to working with the board, the executives, and all Gold Fields colleagues and continuing on our journey. I think it is important as Yunus has stressed that it is business as usual, that our strategy remains intact and that we continue to drive that in a focused way.”
Preece said Gold Fields’s operations were performing well and that they did not foresee any disruptions.
“Our balance sheet is healthy and allows us the room to pursue strategic options,” he said.
Preece said the delivery of its $80 million (R1.4 billion) Salares Norte project in Chile was scheduled for the close of the second quarter.
Anchor Capital investment analyst Stephan Erasmus said: “Chris Griffith acknowledged that Gold Fields should apply the learnings from the Yamana transaction to any such future transaction. This commentary may have spurred some concern for the Gold Fields investment case.”
He said one could argue that there was strategic logic behind the Yamana transaction.
“The transaction would have addressed Gold Fields’s declining production profile from the 2025 financial year onwards.
“Despite this, shareholders appeared dissatisfied with the deal structure which would have diluted earnings and freed cash flow for three to five years,” Erasmus said.
According to Erasmus, Gold Fields’s perennial underperforming assets at South Deep improved notably under Preece’s leadership.
“However, the Yamana deal circular highlighted several executive committee members (exco) as having resigned and left the firm following the expiry of the applicable six-month notice period in late March or early April, 2023.
“In our view, the departure of several exco members and the CEO adds to strategic uncertainty at Gold Fields,” he said.
In October Gold Fields confirmed the resignations of Brett Mattison, executive vice-president of strategy, planning and corporate development; Taryn Leishman, executive vice-president: group head of legal and compliance; and Avishkar Nagaser, executive vice-president: investor relations and corporate affairs.
The share price yesterday slid to an intra-day low of R177.79, down 5%, recovering to R183.93 in afternoon trade.The share is up 116.44% over the past three years.
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