Extract stoush claims chairman Tuesday, 3 February 2009Kate...

Extract stoush claims chairman

Tuesday, 3 February 2009
Kate Haycock

EXTRACT Resources managing director Peter McIntyre says while the ousting of former chairman Bob Buchan yesterday was disappointing, the company has received strong support from major shareholder Rio Tinto.

Extract chairman Robert Buchan was voted from the company’s board yesterday after the uranium explorer’s largest shareholder, Kalahari Resources, called for his sacking.

Following a general meeting yesterday, Buchan was voted out by 99 million votes in favour of the resolution to 87 million against – a bloc that included Rio Tinto, which owns 14.4% of Extract’s shares.

Kalahari, which holds a 39% stake in Extract, last year called for Buchan’s removal saying he was only appointed chairman to build Extract’s presence in North American capital markets with the dual listing of Extract shares on the Toronto Stock Exchange.

The London-based company said it believed this strategy had been an expensive failure, with few Canadian shareholders buying into Extract despite the considerable cost of a dual listing.

As a result, Kalahari said it wanted to see Buchan, who is based in North America, resign and Extract run a more “lean” and “efficient” operation.

This would include de-listing the company from the TSX, which Kalahari said was a heavy cost burden at a time when money was becoming tight, however Kalahari has not yet brought this issue to a shareholder vote.

At the shareholder meeting a new non-executive director, John Main, joined the Extract board in an appointment McIntyre said was a huge boost for the junior.

Main, a geologist, was referred to Extract’s board by Rio Tinto. His resume includes involvement in high-profile discoveries and projects such as the Skorpion zinc mine in Namibia.

He has also been a Rio Tinto employee, and McIntyre said that while Main had links to Rio, he was a fully independent director who was very bullish on Extract’s prospects, and it would be “disappointing” if his appointment was blocked by Kalahari.

McIntyre also said he was pleased that Rio voted in favour of keeping Buchan and showed support for Extract’s current management and the company’s achievements.

Additionally, McIntyre will fill in as Extract chairman until a replacement for Buchan is nominated.

Last year Extract and Kalahari were planning to merge until Kalahari pulled out of the deal.

Kalahari said it was concerned the merger would have given Rio Tinto a 19.8% stake in the merged company – and Rio would have been able to increase this stake without being subject to Australian takeovers law.

This rang alarm bells with Kalahari shareholders who believed Rio would be able to buy out the merged company without paying a control premium, the company added.

The company sought a commitment from Rio that it would not increase its shareholding in Extract for a certain period of time, but was unable to reach a “standstill” deal with Rio.

Extract’s main project is a uranium exploration play in Namibia, including the Rossing South deposit.

Just over a week ago Extract released a JORC-compliant inferred resource for the project of 115 million tonnes grading 430 parts per million uranium for 108 million pounds contained uranium.