Grange Resources managing director Russell Clark has quit suddenly, throwing into confusion the company's $2.9 billion plan for the Southdown magnetite project in the State's south.
In a surprise move that led Patersons Securities to downgrade the Grange shares to "under review" yesterday, Mr Clark announced he would leave the company after nearly 4 1/2 years at the helm on September 15, following a month-long handover period to Richard Mehan. Mr Mehan quit his role as Jupiter Mines chief executive equally suddenly last month, after just over a year in the role.
Mr Mehan said yesterday there was "no connection" between his departure from Jupiter and his appointment as new Grange chief executive.
Mr Clark's resignation immediately sparked market speculation the well-regarded managing director had fallen out with Grange's controlling Chinese shareholders, who are known to be pushing for a favourable Southdown offtake deal.
Speaking at Grange's Perth office yesterday, Mr Clark said discussions with the board regarding his impending departure had been ongoing for "a while" but he would not give a specific time frame.
Mr Clark said his resignation was triggered by personal reasons, which came after he had "ticked all the boxes" to get the Southdown project mine - 100km north-east of Albany - up and running.
"My work here is done," Mr Clark said. "Yes, we need to finance Southdown, yes we need to build the project, but that's another four or five-year process, and to be frank, it's better for someone else to pick that up and have that."
Grange owns 70 per cent of Southdown and last month conceded it would struggle to fund its share, putting up at least 30 per cent of the project for sale.
Kobe Steel and Sojitz Corp own the other 30 per cent of Southdown.
Mr Clark's sudden resignation created rumblings on the stockmarket yesterday, with Patersons head of research Alex Passmore labelling the move a "negative surprise" that created uncertainty at a crucial time. When asked if he had initially intended to see Southdown through to the end, Mr Clark said he saw himself as a "starter" rather than a "finisher".
He was innundated with inquiries from well-wishers yesterday but Mr Clark said he had no specific plans for the future besides a European holiday and plans to build a house. He said he was proud of his achievements at Grange, which were highlighted by the company's growth from a $100 million company with $10 million in the bank to profitable $525 million mid-tier player with $250 million in the bank.
Grange shares fell 1.5¢ to 45.5¢.
Interesting times 2015 The date by when Grange expects to be producing first magnetite concentrate from Southdown, 100km north-east of Albany