Canadian mining company Guyana Goldfields Inc. has reached a settlement with a group of shareholders who had been seeking to take control and will be appointing two independent directors, while two long-serving ones will step down, the company said yesterday.
According to a press release from the Canadian-based public relations company CNW Group, as part of the settlement that was reached with the group of shareholders, including the company’s former Executive Chair Patrick Sheridan, Guyana Goldfields will appoint Alan Pangbourne and Allen Palmiere, who are described as “experienced mining executives.”
“We have reached a constructive outcome with the Requisitioning Shareholders. The two new directors will add valuable experience to the Board, allowing all of us to move forward and devote our full attention to the Company’s optimization strategy for its Aurora Gold Mine in Guyana,” the release quoted Chair of the Board René Marion as saying.
Additionally, the release said the company will also implement a succession plan for the role of the Chief Executive Officer (CEO).
Sheridan had been leading the requisitioning shareholders in the proxy battle to take control of the company.
The release reports Sheridan as saying that the agreement, coupled with the changes that have already been undertaken by the Company, achieves the shareholders’ objective of positive change, and specifically as it relates to reconstituting the Board and management.
Fresh approach
“The new Board and a new CEO will provide the fresh approach needed to optimize the operations and enhance shareholder value. I would like to thank all of the shareholders who expressed support for positive change and I am sure I speak for everyone when I say: it’s time to get down to work,” Sheridan was quoted as saying.
The release pointed out that Pangbourne has more than 35 years of experience in the mining industry, including open pit and underground operations, and prior to his retirement last year, he was the Chief Operating Officer of SSR Mining Inc. Before joining SRR Mining in 2013, he was the Vice President Projects with Kinross Gold Corporation. Palmiere, meanwhile, is said to have over 35 years of operational and financial experience in the mining industry and during his career, he served as President and CEO of Adriana Resources Inc., CEO and Chair of HudBay Miners Inc. and Executive Chair of South Africa’s Barplats Investment Ltd.
The release explained that three members of the Board have agreed to step down: Jean-Pierre Chauvin, who joined the Board in 2012, along with Michael Richings and David Beatty, who joined the Board in 2013.
Beatty had previously indicated that he would not stand for election at the upcoming shareholder meeting, the release said.
It further noted that the company will nominate and recommend that shareholders vote for the election of each of the seven directors of the reconstituted Board at the upcoming annual and special meeting of shareholders that is scheduled to be held on May 22nd.
The directors are: Pangbourne, Palmiere, Marion, Peter Dey, Wendy Kei, Maryse Saint-Laurent and Scott Caldwell.
As it relates to the CEO’s succession plan, the release explained that it will involve the establishment of a CEO search committee, consisting of directors Saint-Laurent, who will be the Chair, Pangbourne and Marion. The committee will undertake to identify a new CEO for the company as soon as practicable and within six months as the current CEO, Caldwell, has agreed to continue to serve as President and CEO while the search is underway.
“I would like to thank the Board for all of their support and guidance over the past few years. In addition, I would like to thank all of the men and women working at the Aurora Mine, Georgetown office and Toronto office for all of their hard work and dedication,” the release quoted Caldwell saying.
“The Board expresses its deepest thanks to Mr. Caldwell for his critical role in developing and constructing the Aurora Mine as well as his steady leadership during his years as a director since 2012 and as President and CEO since 2013. Among his many accomplishments are policies that led to training and promoting dozens of local Guyanese employees and that led to, as of last month, one million person-days without a lost-time injury at the Aurora Mine,” the statement added.
It also noted that the requisitioning shareholders have agreed to immediately withdraw the special meeting requisition that they previously made, and have also agreed to customary standstill provisions that will extend through the conclusion of the company’s 2021 annual shareholder meeting.
The company has also agreed to reimburse the requisitioning shareholders for “reasonable expenses” incurred by them during the proxy contest and separately agreed with Sheridan to resolve certain outstanding claims.
Prior to the agreement, Sheridan had threatened to file a lawsuit against the company’s management after he alleged that Caldwell and his associates were involved in suspicious activity.
However, on April 23, the company, through Marion had stated that Sheridan’s allegations were “plainly untrue and his threatened derivative action is entirely frivolous.”
The battle between the two sides had come amid a series of challenges facing the company which had seen its share price plummet. There were also claims that its gold reserves had been overestimated. Guyana Goldfields is also embarking on underground mining and had faced regulatory issues with the Environmental Protection Agency.
