Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Baja Mining stock was up 10% today after the embattled junior miner announced its CEO has resigned.
Vancouver-based Baja (TSX:BAJ) has faced calls for CEO and director John Greenslade to quit amid massive cost overruns at its Boleo copper-cobalt-zinc project in Mexico.
Baja said in a statement today that board member Tom Ogryzlo has been appointed interim CEO and that Lorie Waisberg will become chairman of the board.
Earlier this month Baja gave in to demands by dissident shareholder Mount Kellett Capital Management for new directors, while it continues to struggle for funding for its Mexico project.
The miner said on May 9th it won’t be able to continue with the project beyond mid-June, unless it finds a way to fund cost overruns quickly.
In a statement, the company said it is exploring funding alternatives for the project and also that it is in discussion with its project partners and third parties.
Baja Mining dropped by as much as 38% in April after announcing its Boleo project will now cost $1.143 billion to construct, a 21.5% increase. Three directors also resigned, leaving a board of only three.
Apart from the snags with construction of Boleo, Baja has also been involved in a bitter – and very public – boardroom dispute with 20%-shareholder Mount Kellet Capital Management.
Mount Kellett, which has pumped $80 million into Baja, had not been pulling punches, accusing Baja CEO John Greenslade of “enriching family and friends” at the expense of shareholders.
For its part Baja called Mount Kellett a wolf in sheep’s clothing wishing to do a takeover of the company by stealth.
