The board of MLM have attacked the character of Mr Gillies in...

The board of MLM have attacked the character of Mr Gillies in their desperate bid to retain their board positions. In their 'Director's Response' they say:

Mr Gillies has retired from the Board and divested his share interest in Metallica. This indicates (without any explanation to the contrary) that he no longer wishes to have any involvement in the management, performance or value of Metallica. The Convening Shareholders offer no credible reason as to whether Mr Gillies' position has changed and, if so for what  reason. Neither the Convening Shareholders nor Mr Gillies provide any detail on the role in which Mr Gillies will undertake: regardless, by resigning as Managing Director and then retiring as Director , Mr Gillies clearly is not interested in undertaking either an executive or non-executive role."

Response from the Convening Shareholders is as follows:

The two principal (largest) Convening Shareholders (CS) met with the then Chairman Peter Turnbull (PT) and the current Managing Director Simon Slesarewich (SS) on 1st August 2018 where they were seeking shareholder support for the proposed merger with Melior. A huge mount of information had been provided by PT & SS, but it was the  CS view that the proposed merger was manifestly bad for MLM shareholders. This was told to PT & SS in no uncertain terms and this position has since been vindicated.  Additionally PT & SS were told and given numerous examples of the management of Metallica since Mr Gillies had retired that had resulted in the performance and value of Metallica plummeting.

Following the meeting an incorrect assumption was made by CS that the proposed merger was dead in the water and that the company would refocus in efforts back to in core of perusing the mining of bauxite.

As history now tell us the merger was announced, As a consequence of this announcement the CS formed the SAG and in doing so sort suitable candidates for nomination as Directors. Mr Gillies was approached and agreed to be nominated for the purposes of assisting in the removal of the current board and getting his flagship company back on track. He conditioned this involvement in that at the appropriate time he would step aside once a search had been done for a suitable qualified and experience replacement director. On a number of occasions the CS have sort a more permanent commitment from Mr Gillies and he has re-enforced his original intention of only assisting to get MLM out of the mess it's current in. He said he felt a strong loyalty to the many shareholders who he had encouraged to invest in the MLM over the years and wanted to see them done right by.

As a result of the attack on the character of Mr Gillies in the Directors Response the Convening Shareholders approach him with a view to providing a reply. His reply is below:

The divesting of my MLM share investment in late 2017 was because for the following 3 key reasons:-

1. (1) Very disappointed with the 100% sale of SCONI Nickel Cobalt Sc to AUZ for only $5m, when there was a very good farm out JV already in place with AUZ and an exciting emerging market for battery minerals, whereas AUZ had to spend minimum of $10m or complete a definitive feasibility study to earn 50%. MLM’s SP and Mcap significantly retracted as a result of this sale, yet AUZ SP and Mcap skyrocketed from 1c to peak of over 13c and market cap added $200m?! (even now with AUZ SP retreated its performance is around 8X that of MLM SP performance)
2. (2) I became increasingly apparent that MLM management would not get Urquhart bauxite in to production by the end of 2017 (even now early 2019 the project production timing is uncertain).
3. (3) I increasingly lost faith in the ability of management to deliver anything ( including a relatively simple dig-truck-barge-ship bauxite project) and the overall decision making of MLM Board and management was poor (post then we have had more examples not least the proposed Melior Reverse Takeover now thankfully binned due to actions of SAG)

By end 2017 it was an easy decision to make.
All three reasons have since been clearly shown to be correct calls and selling my shares was the most prudent decision (MLM shares now around 2.5c), I would think most other shareholders would think the same.

I still like the company and its remaining projects but just don't have any faith in management and current Board, hence my assistance to the SAG.

It should be noted that once a new board is voted in that the SAG will be dis-banded and will be like any other shareholder with absolutely no influence whatsoever over the management and running of MLM.