From The West Australian today :Big holders eye board coup at...

From The West Australian today :

Big holders eye board coup at Resolute



JOHN PHACEAS



Disgruntled institutional shareholders in Perth gold miner Resolute are eyeing a potential coup to overthrow the miner’s board after years of uninspiring returns.
In a letter sent to Resolute’s top 85 shareholders, Queensland investment fund Officium Capital said it had been a supporter for several years but could no longer sit by while the stock floundered.
With gold prices soaring over the past 18 months, the stock has moved from $1.20 to peak at $2.57 in May but has since collapsed.
Officium and its chief executive, David Guy, jointly control more than 7.1 per cent of Resolute, while clients of its listed offshoot Snowball Group control a further 8.6 per cent, mostly acquired at levels below Resolute’s $1.39 close yesterday.
“We are not embittered — we are simply shareholders who are incredibly disappointed in, frustrated by, the performance of RSG and in particular its board and management,” Mr Guy wrote.
Officium believed Resolute was worth more than $3 a share on a “private market break-up basis”, but management had failed to convey that value to investors.
“Accordingly, we are forced to consider doing something ourselves,” Mr Guy wrote, asking investors to respond to a questionnaire on the company’s performance.
Mr Guy told WestBusiness that Officium had been swamped by support since the letter was mailed out last week.
“The general comment seems to be: ‘thank God someone is doing something’,” he said.
Officium’s most likely course of action would be to call a shareholders meeting.
“If we take that step, we’re looking at changes to the board and management, and/or just a sale of the assets,” Mr Guy said.
“We’re open to anything,” he said, admitting Officium had held “broad” talks with outside parties.
“We haven’t had anything we would call concrete, but we have had some general chats with people we know in and around the industry,” he said.
Speaking from the $US120 million ($150 million) Syama mine it is building in Mali, Resolute boss Peter Sullivan said he agreed that the stock was undervalued by the market.
However, most of its multi-million ounce gold inventory was still in the “development stage” with Syama only six months into a two-year construction phase.
“That is our key project and I don’t believe the market will give us full value until it is operating,” he said.
Resolute was “happy to entertain offers” that others might bring, Mr Sullivan said.
“But the question is what is the best time to sell — we think there is a lot of upside for shareholders in seeing Syama through,” he said.
Mr Sullivan said he was “happy to let shareholders decide what they want”.
Officium expects to decide on whether to call a shareholders meeting once it compiles the results of its questionnaire at the end of next week.