Lundin Gold says Beck to replace Hochstein as CEO

Lundin Gold (TSX, Nasdaq: LUG) said CEO Ron Hochstein will step down in November after 10 years in the role and make way for former Filo Corp. boss Jamie Beck.

Beck brings a proven track record of creating shareholder value within the Lundin Group, the Vancouver-based company said late Thursday in a statement. Under his six-year stint at Filo, the exploration program discovered Ecuador’s Fruta del Norte, one of the world’s largest copper, gold and silver deposits, culminating in the company’s $4.1-billion (US$3-billion) acquisition last year by BHP (ASX, LSE, NYSE: BHP) and Lundin Mining (TSX: LUN).

The CEO change, which will take effect Nov. 7, “likely reflects Mr. Hochstein’s desire to leave on a high note after an excellent track record building and operating Fruta del Norte,” Jefferies mining analyst Fahad Tariq said Friday in a note. However, based on Beck’s history of finding new deposits, “the transition could also reflect a strategic shift more towards exploration and mergers and acquisitions.”

Any potential M&A “would have to compete with the district potential at Fruta del Norte,” Tariq added.

Lundin Gold shares fell 3.3% to $89.14 apiece by Friday afternoon in Toronto as wider markets gained, giving the company a stock value of about $21.5 billion. That cut its rise this year to about 180%.

Big return

Beck will start working with Lundin Gold immediately to ensure a smooth transition, the company said. Hochstein will support the transition as he prepares for his unspecified “next challenge” within the Lundin Group.

During Beck’s tenure as CEO, Filo delivered a return of about 1,700% return to shareholders, Lundin Gold said. Since joining in 2009, he has held numerous senior roles within the Lundin Group, including at NGEx Resources (TSX: NGQ; US-OTC: NGQRF), Filo, Josemaria Resources and Lundin Mining. He also has direct experience with Fruta del Norte, having provided financial analysis and support for Lundin Gold’s $240 million acquisition of the property from Kinross Gold (TSX: K; NYSE: KGC) – and later during negotiations on fiscal terms with the Government of Ecuador.   

Beck is a registered professional engineer in Ontario. He holds a Bachelor of Applied Science in Mechanical Engineering from Queen’s University and an MBA from the University of British Columbia.

‘Track record’

National Bank Financial mining analyst Don DeMarco commended Hochstein for a decade of “transformative leadership.” We are “encouraged by a new chapter under the leadership of Jamie Beck, who brings deep knowledge of Fruta del Norte and Ecuador, and a strong track record of success,” DeMarco said Friday in a note.

Hochstein said in the statement: “With the support of the board and our two largest shareholders, I have decided that the time is right to transition Lundin Gold to new leadership.” 

“The past 10 years with Lundin Gold have been a tremendous adventure and very rewarding. During this time, I’ve had the privilege of working with people committed to making responsible mining in Ecuador a success for all stakeholders. I have worked with Jamie for over 15 years in various roles within the Lundin Group, and I am very confident that he will continue to build on this legacy that began with the vision of Lukas Lundin in 2014.”