TORONTO (miningweeky.com) – In the wake of faltering precious metals prices, Canadian miner Iamgold on Monday announced a plan to cut its executive management team by more than one-third and withdraw certain key industry memberships.
The Toronto-based company reported that a recast of the top management structure, all reporting directly to president and CEO Steve Letwin, now comprised Gordon Stothart as executive VP and COO, Carol Banducci as executive VP and CFO, Craig MacDougall as senior VP for exploration, Jeffery Snow as general counsel and senior VP for business development and Benjamin Little as senior VP for corporate affairs, people and safety.
The company had pruned its executive team by 40%, dropping senior VP for health, safety and sustainability Robert Carreau; senior VP for project development Denis Miville-Deschênes and senior VP for corporate development Paul Olmsted.
These changes followed the departure in September of senior VP for human resources Lisa Zangari, who left the company for a similar position in the technology sector. Iamgold’s information technology group would now report to Banducci; Little would assume responsibility for human resources and health, safety and sustainability; Snow would lead business development and Stothart would continue to oversee project development.
As part of a corporate structure transformation to create a more efficient and effective organisation, Iamgold had undertaken a study involving interviews across the corporate offices in Toronto, Ontario, and Longueuil, in Quebec, and also looked at its project development segment.
The existing organisational structure was then benchmarked against best practices and the study took into account several external sources and previous internal studies.
Sagging precious metals prices were forcing miners to implement cost-cutting initiatives across entire organisations. The gold price had recently hit its lowest since April 2010, slumping below critical support levels on freefalling oil prices and US-dollar strength.
Iamgold added that as part of its regular project review process, it assessed the gold price outlook, the economic returns and other key success criteria for each of its current and planned projects.
In its most recent assessment, the company had decided that, other than select studies with critical timelines, work on its significant expansion and development projects would be “considerably reduced”.
Iamgold had disbanded the majority of its project development team effective immediately. The project team and the technical services team would now report directly to Stothart.
As a result, Iamgold said it was adopting a different project execution model for its project development group, who would contract third-party design and engineering teams on an as-needed basis.
Further, Iamgold reported that it had undertaken further cost-cutting initiatives on top of the $125-million in cost reductions realised last year. The company was targeting a 10% overall reduction of corporate general and administrative costs in the 2015 budget as well as productivity and cost-reduction initiatives at the Rosebel mine, in Suriname, and Essakane mine, in Burkina Faso.
As part of its cost-cutting measures, Iamgold revealed that it would reduce a number of its corporate memberships, including withdrawing from the World Gold Council (WGC). It said that despite acknowledging the excellent past work of the WGC, it was necessary in these times to make these tough decisions and focus on the essentials of running the business.
"Iamgold has great promise and the determination, discipline and financial strength to achieve improved economic returns,” Letwin said.