Global Lithium, an ASX-listed explorer backed by Mineral Resources, refused a request by a minority shareholder, Sincerity Development, to call a meeting with the aim of ousting two directors.
Sincerity has vowed to keep up its fight to dump former Rio Tinto and Fortescue executive Greg Lilleyman and Hayley Lawrance from the four-member board of the company. It speaks for 6.93 per cent of Global Lithium’s share register.
Global Lithium executive chairman Ron Mitchell inspects diamond drill cores at the company’s Manna project in WA.
Sincerity is controlled by Chinese-born businessman Liaoliang “Leon” Zhu and is part of a property development group that has offices in Australia, China and South-East Asia.
Global Lithium said the notices from Sincerity were “invalid and ineffective” and it would not call a meeting.
Sincerity wants Mr Lilleyman and Ms Lawrance replaced by experienced miner Barry Mitchell
Mr Zhu referred questions on Global Lithium to his lawyer, Tim Houweling, who said Sincerity would continue to push for a shareholder vote.
Global Lithium has two lithium projects in Western Australia, including the Manna project east of Kalgoorlie that sits in the same region as the Mt Marion lithium mine owned by MinRes and China’s Ganfeng Lithium, and the Bald Hill mine owned by MinRes.
Global Lithium’s policy has been to disregard offtake agreements unless the other party commits to providing capital. Its only offtake agreement covers 30 per cent of any spodumene concentrate production, which is with China’s Canmax Technologies.
Indeed, Canmax owns nearly 10 per cent of Global Lithium and has a controlling stake in lithium hydroxide maker Yibin Tianyi Lithium. Global Lithium’s other backers include Chinese mining services magnate Yongfang Guo and former Norton Gold Fields chief executive Dianmin Chen.
Mr Houweling said it would be “completely and utterly false” to suggest Sincerity’s actions had anything to do with Chinese interests seeking control of Global Lithium.
“It (Sincerity) is obviously an Australian company looking to make a difference in Australia, to maximise investments and to contribute to the local economy,” he said.
“We’ve got to make sure that we take advantage of every opportunity that’s presented to the [Global Lithium]. There are people who have experience and knowledge in the mining sector that we take the view would be best placed to serve on the board.”
Ron Mitchell, Global Lithium’s executive chairman, said the company was set to achieve a number of milestones in the next few months, including the release of a definitive feasibility study and native title agreement.
“What I’m advocating for here is stability because we’ve got all these key milestones just around the corner, and there’s a number of value accretive corporate opportunities we’re looking at as well,” he said.
Mr Mitchell said the attempted board shake-up was disappointing. “We are prepared to deal with it and ultimately pursue a course of action that is in the best interest of all shareholders.
“There’s been strong interest on a number of fronts from a range of counterparties, both domestic and offshore, in terms of partnerships. I’ll leave that word partnerships very broad, but there is an appetite to partner with our company.”
Mr Mitchell said interest had come from Japan, South Korea, China and Australia.
Shares of Global Lithium were flat at 24¢ on Tuesday.
GL1 Price at posting:
23.5¢ Sentiment: Buy Disclosure: Held
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