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Feeling the pain

“Caring” is not a term many would use to describe Michael McMahon – the hard-bitten former CEO of Impala Platinum Holdings Ltd Impala Platinum Holdings [JSE:IMP] (Implats) who still sits on the Implats board and is now chairman of Central Rand Gold [JSE:CRD] (CRG). Before I’m accused of being unduly harsh in my characterisation, I’d remind readers this is the man who described the removal of Fred Roux from his position as chairman of Implats as “an assisted suicide”.

Be that as it may, in his latest review as chairman of CRG McMahon does show his “caring” side. He tells shareholders: “I’m very aware of the pain that our shareholders have endured. The company and its officers have come in for some criticism in terms of the gap between historical expectations and performance.”

That’s putting it mildly. CRG is one of the biggest dogs ever to have listed on the JSE and its current price of 11c/share compares with an all-time high north of R20 in 2007.

Of course, McMahon can afford to be objective, sympathetic and conciliatory in his review because almost all of the catastrophe that unfolded at CRG didn’t happen on his watch and the heads of the executives responsible have already rolled.

As he points out, between 2008 and mid-2009 the following were replaced at CRG: the CEO, the chief financial officer, the company secretary, the heads of geology and metallurgy and the entire senior mining and mine planning team.

The only survivor was the chairman, who lasted until 14 April last year, when McMahon took over, declaring: “I’m confident CRG has the right team in place to move forward into full scale commercial gold mining and carve out a niche as a sustainable producer in years to come.”

I did say “almost all of the catastrophe”. In March this year CRG shut down its underground operations pending a reassessment of its overall position.

McMahon’s latest assessment is much more cautious. After a comprehensive examination of what went wrong, he says: “Given resolution and progress on the above-listed uncertainties, the company expects to be able to reassess its prospects by the end of October 2011.”

Don’t hold your breath.
 
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