LONDON (ShareCast) - (Sharecast News) - Gem Diamonds announced on Thursday that deputy chief executive officer and chief operating officer, Johnny Velloza, plans to leave the company in September to take up a position as joint CEO at a copper and cobalt company in the Democratic Republic of Congo.
Velloza will join Gem's board in an executive capacity in July and be an non-executive director from September.

The company said a search for his successor is underway and a further announcement will be made in due course. In the interim, Gavin Beevers - a former De Beers technical director - will join the group as technical advisor from 1 July during the handover period and beyond.

Gem said Beevers has spent 10 years on its board and is well versed in the company's operations.

Chief executive officer Clifford Elphick said: "We are sorry to see Johnny leave our company as an executive but look forward to his ongoing contribution as a board member in the future. We are most grateful to him for his key role in the transformation process which the company will continue to pursue, to generate further strong returns to our shareholders. We appreciate that this is a great opportunity for Johnny and wish him all the best in his new role."

Velloza said: "It is with great regret that I leave Gem Diamonds as an executive officer after working through a very significant turnaround process which has seen enormous progress and is on track to deliver on the targets the company has outlined. I look forward to continuing to support the company as a non-executive director. A tremendous opportunity has presented itself with additional scope for personal growth which I have chosen to accept."

Canaccord Genuity said that Velloza's departure is a loss for Gem. However, the structures put in place by Gem's management to improve operations and reduce costs should continue to improve investment returns.

"Retaining Velloza on the board and bringing back former De Beers executive and Gem non-executive director Gavin Beevers should bridge the gap while a suitable replacement is located. To the extent that the cost and efficiency measures are seen to be continuing, and there is a replacement in the not-to-distant future, we do not see any reason to change our recommendation or price target."

It rates Gem at 'buy' with a 145p price target.

At 1240 BST, the shares were up 0.4% to 120.50p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE