Former Atlas Iron managing director Ken Brinsden has joined a budding lithium producer that will pay less than half his old salary, even though the company has a market cap five times that of his old employer.
Pilbara Minerals has appointed Mr Brinsden chief executive with effect from January 18 2016.
It has been one of the best-performing stocks on the ASX during the past six months, with its share price jumping from just a few cents in April to 30.5 cents currently.
The strong investor support enabled the company to raise $12 million at 23 cents last month.
That money will be used to complete a feasibility study on its Pilgangoora lithium-tantalum project.
The capital raising followed commissioning this year of the company’s boutique Tabba Tabba tantalum project, which provides additional cash flow.
Mr Brinsden will work alongside executive director Neil Biddle, who announced today he would step down from his executive role after completion of the Pilgangoora feasibility study, targeted for mid 2016.
Pilbara’s technical director, John Young, will continue in his current role.
Chairman Tony Leibowitz said Mr Brinsden was the ideal person to lead the financing, development and construction of the Pilgangoora project.
“Ken’s extensive experience in building and operating large-scale projects will be invaluable to us, as will his intimate knowledge of the operating environment, the permitting and regulatory framework and the logistics of working in the Pilbara,” Mr Leibowitz said.
Mr Brinsden spent nine years with iron ore miner Atlas Iron, including three years as managing director.
He moved aside from that position in June, when the company’s then-chairman, David Flanagan, returned to his original role as managing director.
Mr Brinsden continued as an executive director up to September, when he moved to a non-executive role.
His new role carries total fixed remuneration of $350,000 per annum, inclusive of superannuation.
He will also be eligible for up to 40 million share options with a strike price of 40 cents.
By comparison, his salary at Atlas was $797,000, before the company started cutting executive salaries in December 2014.
Mr Flanagan’s total fixed remuneration is currently $669,790.
The remuneration levels at the two companies appear to be based more on their history and scale of operations than their current value.
At current share prices, Pilbara Minerals is valued at about $250 million, while Atlas is valued at $50 million.
Atlas is producing iron ore at an annual rate of 14-15 million tonnes per annum, but has been marked down because of its high debt, modest reserves and the low iron ore prices.
In contrast, Mr Biddle said Pilbara Minerals was uniquely positioned in a tough market with a world-class deposit, exposure to a commodity with outstanding supply-demand fundamentals and a clear pathway to development.
• See next week’s print edition of Business News for the results of the 2015 CEO Salary Survey.
