Shore Gold’s diamond saga continues
This project has seen some huge highs and huge lows – but it always seems to survive. It was even the tongue-in-cheek topic of one of my last blog posting before I signed-off for 1.5 years. The world’s largest diamond deposit – the one in question here – is just east of Prince Albert. They almost had it financed a few years ago, but then the markets turned. So, they’ve been proving-up more diamonds to improve the economics of the project and the likelihood of economic success.
Anyway, Shore Gold has an almost religious set of share holders that have been living this resource-soap-opera for over a decade. The story below is the episode that aired-out yesterday.
- 14 Jun 2016
- The StarPhoenix
- ALEX MACPHERSON
Shore Gold investors fail to oust execs
Shareholders want updates from board of diamond exploration firm
Dissident shareholders tried and failed to oust three directors and force regular updates from a Saskatoon diamond exploration and development company.
“We were looking to get better transparency on the board of directors and we’re looking for improved communications between the shareholders and the company,” said David Wright, the shareholder who orchestrated the attempt at Shore Gold Inc.’s annual general meeting on Monday.
The plan to unseat Kenneth MacNeill, Harvey Bay and Arnie Hillier from Shore Gold’s board using proxy votes was deemed “illegal” by the firm’s chairman and ultimately defeated at the tense meeting in Saskatoon.
After the directors were appointed, Wright — who chairs the Shore Gold Shareholders Association — moved that the company issue regular updates on its progress. That motion was also defeated.
“I can’t imagine that the shareholders … at least the group that’s been talking to me, and that I’ve been talking to, are going to be particularly happy with the result from today,” Wright said following the meeting.
Shore Gold began exploring for diamonds in northern Saskatchewan in 1995. It has been working to establish a mine on its Star- Orion South Diamond Project east of Prince Albert for almost two decades.
In 2011, the company estimated the property contained US$8.3 billion worth of diamonds. A year later, “world economic uncertainties” stymied a financing deal and Shore Gold cut staff and director positions.
Wright has spoken up on behalf of the Shore Gold Shareholders Association before.
At the company’s 2012 annual meeting, his motion to create measurable performance targets for MacNeill was defeated.
George Read, Shore Gold’s senior vice-president of exploration and development, said at the meeting that markets have improved and indicated resource estimates at the site have been revised, to 55.4 million carats from 34.2 million carats,
MacNeill, who is also Shore Gold’s president and CEO, said the firm is working to complete an updated feasibility study based on the revised geological estimates, and that 2015 was a “great year.”
“We made great strides forward and we’re able to attract attention of significant other parties … We’re pleased with the progress we’ve made,” MacNeill said.
After the annual meeting was called to order, Shore Gold chairman Brian Mennell said Wright broke Canadian securities law by not issuing a “dissenting circular” while “soliciting ” proxy votes.
The vote was allowed to stand because shareholders appointing proxies to act on their behalf didn’t violate the law, and it was important to avoid “disenfranchising” any shareholder with an opinion on the direction of the company, Mennell said.
Before the meeting, Shore Gold had extended the deadline for shareholders to appoint a proxy to allow “certain shareholders” who had become aware of the situation to register, Mennell said.
“I think it’s quite a normal and not unusual process for shareholders, for whatever reason, to request extensions for proxy deadlines and for boards to opine on it, and grant it,” Mennell said.
Shareholders should voice their opinion and vote their conscience, but it’s vital that everyone with a stake in the company has access to the same information, MacNeill said.
“I look forward to talking to shareholders … and I always look forward to the annual meetings to be able to communicate with the shareholders,” he said.
Wright said Mennell and Shore Gold’s lawyers are entitled to their opinion about the legality of the proxy vote, and that he doesn’t expect a court case to arise from Monday’s meeting.
Shore Gold is expected to publish the vote counts Tuesday.
Wright said he didn’t know how close the group came to succeeding but noted that the number of shares at the meeting was three times the number recorded at last year’s event.
“Clearly, not only have the shareholder group that I sort of represent spoken a lot louder than they have in the past ( but) the management of the company was able to ramp up, if you like, on their side as well.”