By Valentina Elizarova
The unexpected and simultaneous departure from the KazakhGold board of two most prominent independent directors is an event that alarms minority shareholders, Troika Dialog Kazakhstan analysts say.
“KazakhGold has announced that two of its oldest independent directors, Stephen Oke and David Netherway, have resigned from the board. A new independent director has been elected, Adrian Coates who used to hold an influential position at HSBC. Boris Zakharov, gold miner Polyus Zoloto’s deputy CEO, has also left to make room on the board for a top executive at KazakhGold, Alexey Teksler,” the analysts report.
These latest developments have significantly affected the quality and value of the board as a tool of corporate governance, observers think. “Reasons for the resignation have not been disclosed. The new independent director, Adrian Coates, used to advise Norilsk Nickel in the second half of 2008 on the latter’s new corporate strategy. We’d like to note that HSBC also advised Polyus Zoloto as the latter was acquiring KazakhGold in 2009,” Troika Dialog Kazakhstan emphasizes.
Terms and timeframes for $100m worth of a rights issue reportedly remain a major uncertainty factor for the firm’s further pricing dynamics.
Troika Dialog Kazakhstan also comments KazakhGold’s main strategies that Alexey Teksler made public on March 17. “The long-awaited development strategy, originally to be published in February, is still being worked out. The company elaborates several options, and the management believes the board will probably approve the expected document by late April, before it’s made known to market players. Total investment is expected to hit $600m,” the analysts say, outlining the company’s plans to re-equip production facilities, boost underground and open-pit extraction volumes, and build new heap leaching facilities and mills.
The moment the new strategy gets published is reportedly likely to become a major pricing mover.