Enough of Uranium says Froneman

Enough was enough, says Froneman
Source: http://www.miningmx.com/energy/952794.htm
Allan Seccombe
Posted: Thu, 21 Feb 2008

[miningmx.com] -- IT was time to move on, and time for a change because a chief executive should only be in the position for five to seven years, said Neal Froneman, who suddenly and unexpectedly quit his position as the head of Uranium One on Thursday.

Froneman, who spent the five years building Uranium One from scratch, announced his resignation at the same time the company issued a second downward revision of uranium production targets in four months because of problems in South Africa and Kazakhstan.

Uranium One shares fell hard in South Africa on news of Froneman’s departure and the production revision, wiping out some R5.5bn in market capitalisation.

The latest reverse in fortunes for Uranium One played no role in his decision, Froneman said.

“Uranium One has moved into a very different phase. There’s going to be a lot more focus on operational issues in coming years and it is an opportune time for me to move on,” Froneman told Miningmx in an interview.

“I’ve had a very difficult, but exciting five years. It gets to a point where enough is enough," he said.

“I left of my own accord. I could have stayed on, but I’ve always said the appropriate tenure for a CEO is five to seven years,” he said, adding he has offered his services as a consultant to Uranium One, which had aspirations to challenge Cameco for the position as number one uranium producer.

Jean Nortier, a company stalwart who is filling the CEO position in the interim, suggested the ongoing problems at the Dominion mine in South Africa could have been one of the causes to prompt Froneman's departure.

"The issue of Dominion raised a lot of tensions internally and it's not nice when an operations doesn't function optimally. You not only have to deal with staff working longer hours, but you also have the difficulties of the promises you made to the market," Nortier told Miningmx.

"Neal's decision was very quick otherwise we would have put in place a proper succession plan. It was a pretty big surprise," he said. Asked whether his departure could have been better planned, leaving a succession strategy in place, Froneman said there was a lot of talent in the company. “I think there’s good succession in place in the company,” he said.

“It’s very difficult to prepare the market for a change,” he said, arguing that by telling the market in advance he was leaving it could have built up an overhang of shares. “Either I could have told the market well ahead of time that I was leaving, but that creates its own longer-lasting damage, or I could just get to the point and leave,” he said. “At executive level, you should just resign and move on.”

Froneman is going to take a break of month or more before devoting his attention to Aflease Gold, a company majority held by Uranium One and one which has long headed as CEO.

“There’s always sadness in leaving behind something you’ve worked so hard to build, but I’m very proud of what’s been achieved. I’ve mixed feelings. I’m happy to be getting into something new,” he said.

The first thing he’d like to do is take the company to an offshore listing, most likely to be on a North American bourse, before looking at mergers and acquisitions.

There needs to be more liquidity in Aflease Gold shares, and while he says he’s not expecting Uranium One to completely exit its holding, Froneman would like to see more Aflease Gold shares released for the retail market.

There are mounting challenges in operating a mining company in South Africa, with the power shortages and the government's approach to enforcing safer working conditions on mines being just two of these, he said.

“If you talk to any mining company in South Africa at the moment you will hear they are operating under ridiculous conditions. The power outages have having a bigger impact than is being realised in the market,” Froneman said.

The Department of Minerals and Energy’s approach of temporarily shutting down shafts when there’s a death on a mine is counterproductive, he said.

“People react very badly when they’re put under pressure from a safety point of view,” he said. “The big stick approach doesn’t work. It’s been tried before and didn’t work.”

Once he’s achieved what he wants to at Aflease Gold, most likely when its growth aspirations have been met, he will move on to something else. “I’m at that stage in my life where I’m looking at other options, but there’s nothing planned.”

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Froneman says Dominion a solid asset as Uranium One continues its slide

Source: http://www.miningweekly.co.za/article.php?a_id=127674

By: Matthew Hill
Published: 22 Feb 08 - 16:44

While distressed uranium-miner Uranium One's stock continued its downward spiral on Friday, shedding a further 15%, questions had been raised about the legitimacy of its Dominion Reefs Uranium Mine, near Klerksdorp, after 2008 production forecasts were slashed by one-quarter.

However, Neal Froneman, who suddenly stepped down as Uranium One CEO on Thursday, said he continued to believe that the project was solid.

"I am still of the view that Dominion is a solid asset," he told Mining Weekly Online in a telephone interview.

Uranium One was trading 15% down at around R32 a share by 11:00 in Johannesburg, before regaining some ground to close at just more than 10% down for the day.

Consultancy firm SRK Consultants compiled the competent persons report on the project in 2006, and the author who signed it off said that the firm had done it in compliance with international standards.

Partner and corporate consultant Roger Dickson said that SRK had no reason to believe that its report was not 100% accurate.

A media report on Friday said that Anglo American had compiled a report on Dominion ten years earlier, which reported a recovered grade that was less one-half of what SRK cited.

Dickson said that he had not seen such a report, nor was aware of the existence of one.

He said he "found it quite hard to believe" that Anglo American would have spent R20-million on such a report, as the media report suggested.