Gemsearcher,
I couldn't find an adequate electronic story at the G&M site. Here's the FP version:
Jennings quits job as boss of Southernera
Bows to pressure
Peter Kuitenbrouwer
Financial Post
Canadian diamond mining pioneer Christopher Jennings stepped down from the chief executive's job yesterday at the
company he founded, SouthernEra Resources Ltd., and admitted that he was bowing to pressure from the investment
community.
"There's undoubtedly a feeling out there that Chris should be looking for new diamond mines and bring in a strong manager to
run the operations of the company," the pugnacious Mr. Jennings said in Toronto yesterday. "We need a good strong leader
in this company and I'm looking forward to working with him."
Mr. Jennings said he will stay on as president and chief executive until the end of the year, after which he will hand over the
job to a new person who has not yet been found. The company said he will continue to serve as non-executive chairman of
the board and "play a central role in the company's exploration and development activities."
A mining analyst, who asked not to be named, echoed investors' frustration with the poor showing at SouthernEra, whose
share price has slid from a high of $18 two years ago to close at $2.75 yesterday on the Toronto Stock Exchange.
"They've got a daunting task to regain confidence and show they can maintain cash flow from diamond operations," the
analyst said.
Mr. Jennings said he has been telling people for months that the firm has been looking for a new chief executive. But he said
he felt investors did not believe him.
"This is sending a strong message that we are working to get our share price back," he said.
Mr. Jennings, a geologist who began his career with the Botswana Geological Survey, was lured to Canada from South Africa
by Falconbridge Ltd. in 1981, and began some of the first diamond exploration in the Northwest Territories in the early
1980s.
But others found the diamonds in Canada's North. Mr. Jennings went on to found SouthernEra in 1991, and its first big find,
ironically, was a diamond mine back in his homeland, South Africa.
But exploiting that find, the famous Marsfontein cache on a cattle ranch in the Northern Province, proved more difficult, as
heirs emerged who claimed the deposit and then sold it to the giant De Beers Consolidated Mines Ltd.
After a protracted fight with De Beers, SouthernEra settled for 40% of the find.
The fight laid bare the uphill battle faced by South Africa's post-apartheid regime in encouraging foreign mining investment in
the face of entrenched elites represented by De Beers.
De Beers did not return calls yesterday.
While the Marsfontein deposit has proven rich, Mr. Jennings admitted yesterday that the market has been, for the past six
months, wondering what's next about his company.
"We have to demonstrate to people that we have a long life after Marsfontein. We have to convince them that we can replace
the Marsfontein find."
One long-time investor said he bought more shares yesterday, and called Mr. Jennings' announcement good news.
"As an explorer he's top notch. That's where he needs to be relegated to and the board decided that," the investor said.
Another investor echoed that view. "The guy that staked the Abers-Diavik claim [a Northwest Territories diamond mine
project now awaiting federal approval] and found the richest diamond pipe in the world [Marsfontein] is going back to doing
what he does as well as anyone in the world," the second investor said.
Lee Barker, vice-president of SouthernEra, said yesterday that he is interested in the top job. "No names have been generated
yet," by a search firm retained to look for candidates, he said. He praised Mr. Jennings as the "godfather of the Canadian
diamond rush."
Mr. Jennings said that lately, office work has prevented him from spending time at the company's diamond drilling operations
in the Northwest Territories and in Brazil.
"I can make a huge contribution to finding the next mines in countries like Canada," he said.
PHIL |
