Sept 16 (Reuters) - Capital-strapped small fertilizer companies in Canada are shuffling their senior executive ranks to draw investors in a period of weak prices.
Stonegate Agricom Ltd, which is developing a phosphate mine in Idaho, said on Tuesday that Chief Executive Mark Ashcroft resigned, the latest change at the top among small players in the sector. Others that have installed new senior executives this year include Canada’s Arianne Phosphate and Karnalyte Resources Inc.
Fertilizer values are rising off the floor prices reached earlier this year, but their upside looks limited, Rabobank said in a report on Monday.
Stonegate’s parting with its CEO was mutual, said co-chairman Ian McDonald, who will carry out CEO duties on an interim basis with co-chairman Kerry Knoll. He declined to give further details.
“Nobody’s having any parties, because nobody’s happy, but there’s been no pressure here based on Mark’s performance,” McDonald said.
Stonegate shares dropped 3 Canadian cents, or about 19 percent, to 13 cents in Toronto. For the year, the stock is down nearly one-third.
Stonegate has tentatively arranged most of its financing for the low-capital, $120 million Paris Hills phosphate project, but has not yet lined up a committed, long-term buyer, a key condition.
Earlier this month, Arianne Phosphate, which is developing a mine in the Canadian province of Quebec, said that Brian Kenny, an engineer by trade, had resigned as CEO but would stay on as a consultant to cut capital and operating spending.
Executive chairman Pierre Fitzgibbon, a former investment banking executive, took over the job of finding a strategic partner or investor to buy the company.
“I think this (stage) requires a different type of leadership,” Fitzgibbon said.
In August, Karnalyte Resources made Tom Drolet’s title as CEO permanent, dropping his acting status. He replaced Robin Phinney, the company’s founder, in May at the helm of Karnalyte.
“My opinion is the bottom is in” fertilizer markets, Drolet said. “But what we don’t know is the slope up, so that’s the prevailing reason why at times like this companies say, ‘Are there any changes you want to make?'”
The company is seeking financing to build a potash mine in the western Canadian province of Saskatchewan.
“Whether you’re looking for a corporate investor or acquirer, or you are relying on the good graces of the market to finance, right now it’s definitely a tough slug,” said Brian Ostroff, managing director of Windermere Capital, which holds shares in Arianne and Stonegate.
Ostroff is also a director of Arianne.
“You can’t have a one-size-fits-all management team” for early-stage mining companies, Ostroff said. “Quite honestly, if a management team doesn’t change over, to me that’s actually a little alarming.” (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Grant McCool)