NEW YORK Mark A. Smith,
president and chief executive officer of Molycorp Inc., has
resigned from the rare earths producer.
The Greenwood Village,
Colo.-based company has appointed Constantine Karayannopoulos
as interim president and chief executive officer as it begins a
search for a replacement.
"We are confident we can find a
permanent chief executive officer with the expertise and
credibility to maximize our great potential," the company
In a research note, analysts at
Baltimore-based Stifel, Nicolaus & Co. Inc. tied
Smiths departure to the Aug. 2 disclosure that the
company needed additional funds to complete its Mountain Pass
Mine in California and the Nov. 8 disclosure that it was
experiencing cost overruns due to faulty engineering work, in
addition to a Securities and Exchange Commission (SEC)
investigation into the accuracy of company disclosures.
A company spokesman denied that
Smiths departure was linked to the SEC investigation.
"The boards decision to replace Mr. Smith had absolutely
nothing to do with the pending SEC inquiry," he told
AMM in an e-mail.
Smith could not be reached for
Molycorp also faces a
class-action lawsuit accusing it of violating the Securities
Exchange Act of 1934, according to the companys
third-quarter 10-Q statement. "Misleading statements about the
capability of the companys Mountain Pass mining operation
and (its) earnings caused Molycorp common stock to trade at
artificially inflated prices," the suit, filed in U.S. District
Court in Colorado, alleges.
"The company believes the
allegations are without merit and that it has valid defenses to
such allegations," Molycorp said in the 10-Q filing.
The companys stock price
has plummeted this year, with shares ending Wednesday at $10.99
apiece on the New York Stock Exchange compared with $25.12 on
the first trading day of the year.
Karayannopoulos previously was
president and chief executive officer of Neo Material
Technologies Inc., a Canadian rare earths processor Molycorp
bought earlier this year for Canadian $1.3 billion (
amm.com, June 13).