Article in The Australian

Magnis share price takes a hit on board departures

• The Australian
• 6:54PM November 1, 2016
• Mergers & Acquisitions Editor
• @BridgetCarterb
  

What is it with graphite stocks and sudden board departures?

Just weeks after Syrah Resources shocked the market and detonated its share price when it announced the immediate resignation of founding managing director Tolga Kumova, Magnis Resources has been hit by its own unexpected board changes.

Magnis, which at one point looked set to leapfrog Syrah as the ASX’s biggest graphite play by enterprise value following Syrah’s Kumova meltdown, on Monday issued a curt announcement informing the market that directors Len Eldridge and Cobb Johnstone had departed.

Their resignations came only five months after their appointment and just 10 days after Magnis shareholders approved the issue of 1 million options to each of the pair with an exercise price of 70c each.

Both Eldridge and Johnstone were formerly with copper mining success story Equinox Minerals and were seen as the right appointments to help progress Magnis towards production. Eldridge’s role as executive director financial was particularly important, given his responsibilities included project financing and “key contractual negotiations”.

The sudden departures have further weakened a share price that was already starting to feel some pressure. It has fallen almost 14 per cent since Monday’s announcement and is down more than 35 per cent from its September high of 95c.

Investors have been growing twitchy about the apparent lack of progress made towards securing an offtake agreement from a Western customer, following overtures earlier in the year that such a deal was close.

Magnis’s Nachu graphite in Tanzania was supposed to be particularly attractive to Western customers as its graphite lent itself to chemical-free processing and therefore shaped as a “greener” supply option.

http://www.theaustralian.com.au/bus...s/news-story/8f9307cd9847bde83e65bc19ceb765ef