Businessman Mick Shemesian has put his cards on the table, calling for a meeting of Cape Lambert Iron Ore shareholders on October 15 aiming to roll the company’s existing board.
Mr Shemesian’s Hong Kong-based company Power United has called for the removal of executive chairman Tony Sage and fellow directors Tim Turner and Brian Maher, to be replaced by Elias Khouri, Blair Sergeant, Tony Roberts and Martin Bennett.
Power last month converted 50 million options into an 11.5 per cent stake in the company, which has $320 million in cash following the sale of its Pilbara magnetite project to China Metallurgical Group Corp (MCC).
Representatives of Power United said in a statement that the company was concerned about the cashed-up Perth miner’s $250 million plan to buy into a Sierra Leone iron ore asset controlled by entrepreneur Frank Timis.
“We are firmly of the view that no such decision should be made by the board without seeking the approval of the Company’s shareholders,” the firm said in an announcement.
“(We) are particularly concerned that the effect of the transaction is to deliver a potentially controlling interest in the Company to parties associated with the current owner of the Marampa Project without those parties being identified and without shareholders having the opportunity to vote on the transaction.”
The Marampa project is owned by Mr Timis’ company, African Minerals.
However, it is understood that Cape Lambert’s biggest shareholder, Russian steel giant Evraz, is not part of the Power move and unlikely to back the proposal, despite itself pushing for a board seat amid unease with Mr Sage’s plans to spend the MCC sale proceeds.
Revelation of the move came as Cape Lambert confirmed it had received an $80 million down-payment from MCC to take proceeds from the $400 million sale to $320 million. The final $80 million instalment is due once MCC is granted a mining lease and related construction approvals.
Cape Lambert intends to return up to $100 million to shareholders, leaving it with enough cash to pursue projects such as Marampa.
The existing company board has advised shareholders to take no action with respect to the notice until it had obtained legal advice on its validity.
Shares in the firm closed down 3¢ or 7 per cent to 40¢.
PERTH PETER
CFE Price at posting:
19.3¢ Sentiment: Hold Disclosure: Held
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