Apr 30, 2019 News
It appears that growing internal troubles at the country’s biggest gold mining company are nearing a resolution.
Yesterday, Guyana Goldfields Inc. announced that it has reached a settlement with a group of shareholders who had requisitioned a special meeting of the company’s shareholders.
One of the shareholders was Patrick Sheridan, the Canadian company’s former Executive Chair and founder.
The settlement will see two directors and the Chief Executive Officer (CEO), Scott Caldwell, being replaced, and money for the shareholders who wanted the meeting.
The shareholders had requested a meeting, which was scheduled for May 22nd.
That special meeting would have led to a fight in a company that started commercial production in January 2016, producing annually over 150,000 ounces.
However, troubles started last year after Sheridan was fired. He was part of the group of shareholders who claimed that the current management has made poor decisions that caused the company to lose hundreds of millions of dollars due to a fall in share values.
There were counter accusations that the amount of gold that company has was over-estimated. The Government had been worried, as Goldfield’s contributions to the country’s revenues have been significant – almost US$50M in royalties in last three years, among other spinoffs. The company has more than 500 workers and is preparing to start underground mining soon. The internal shareholders’ fight would have been something it could ill-afford.
The company announced recently that it has started a number of measures to reduce costs, including selling its Twin Otter plane and consolidating inventory and its accounts.
According to the company, in its statement giving details, it will appoint two experienced mining executives, Alan Pangbourne and Allen Palmiere, to join the Board as independent directors – two long-serving independent directors will step down.
The company will also implement a succession plan for the role of CEO, to replace Scott Caldwell.
“We have reached a constructive outcome with the Requisitioning Shareholders,” said René Marion, Chair of the Board.
“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.”
“This agreement coupled with the changes already undertaken by the Company achieve our objective of positive change, specifically reconstituting the Board and management. The new Board and a new CEO will provide the fresh approach needed to optimize operations and enhance shareholder value,” said Patrick Sheridan. “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.”
The Board said it is welcoming its two new directors.
Pangbourne has more than 35 years of experience in the mining industry, including open pit and underground operations. Prior to his retirement last year, he was Chief Operating Officer of SSR Mining Inc. Before joining SSR Mining in 2013, he was Vice President Projects, South America, with Kinross Gold Corporation.
Palmiere has more than 35 years of operational and financial experience in the mining industry. During his career, he has served as President and CEO of Adriana Resources Inc., CEO and Chair of HudBay Minerals Inc, and Executive Chair of South Africa’s Barplats Investment Ltd.
“Jean-Pierre Chauvin, who joined the Board in 2012, as well as Michael Richings and David Beatty, who joined the Board in 2013, have agreed to step down. The Board warmly thanks them for their tireless service. Mr. Beatty had previously indicated that he would not stand for election at the upcoming shareholder meeting.”
According to Guyana Goldfields, 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 scheduled to be held on May 22, 2019. They include Peter Dey; Wendy Kei; René Marion; Allen Palmiere; Alan Pangbourne; Maryse Saint-Laurent and Scott Caldwell.
CEO SUCCESSION PLAN
The Board’s CEO succession plan involves the establishment of CEO search committee consisting of independent directors Ms. Saint-Laurent (chair), Pangbourne and Marion.
“The CEO search committee will undertake to identify a new CEO for the Company as soon as practicable and, in any event, within six months. Scott Caldwell has agreed to continue to serve as President and CEO while the search is underway.”
Caldwell expressed gratitude to the workers at the Aurora Mine, Georgetown office and Toronto office for all of their hard work and dedication.
“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 company yesterday said that the shareholders have agreed to immediately withdraw the special meeting requisition previously made by them, and have also agreed to customary standstill provisions extending through to 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. The company has separately also agreed with Mr. Sheridan to resolve certain outstanding claims. The full settlement agreement is available under the Company’s profile on SEDAR.”
Guyana Goldfields Inc. is a Canadian-based mid-tier gold producer primarily focused on the exploration, development and operation of gold deposits here.
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