The board only has the power to remove the management team. And yet the board is being changed at the same time. If more than the majority of the board is changing then how has the process of removing management been instigated? There is only one representative from Blumont on the board.
Does this mean independence will be gone from the company?
What does this mean for the retail/minority shareholder? In other words what does it mean for every shareholder except for Blumont?
How much is this going to cost the company with the termination payments?
How much difference will the replacement of the board and the management team actually make to the operations of the company? The mine plan may change, but what else can really change? It is a mining operation. You dig up reserves and then you process it. A change in the mining schedule may improve the grade, but the resource is a constant over the mine life. It is what it is.
A change in management may improve cost management, because there will be a reduction in those massive consulting costs incurred since this time last year as it will provide certainty of the future, but the key costs associated with the mine will be difficult to reduce at any significant rate.
New management needs to be more than just a change, but instead answers to a number of questions affecting the operations of the company. If it is just a change of management because the ones up for election were being voted down anyway then what does this do for the company and shareholders as a whole?
Depending on the changes the AGM will still be interesting because there will need to be a confirmation of the appointment of the casual directors that will come on board, as per the constitution. You may find that the AGM will be deferred until the EGM at which time there will be a vote for the new directors vote and the issue of the Convertible Bonds. However, the risk is with Blumont in control the previous deal may be repriced.
What would that mean for minority shareholders?
I called for accountability of the Managing Director, Brad Sampson, and for him to not hide behind the Constitution to avoid being voted off. This may be completely different.
Be careful what you wish for?
DML Price at posting:
6.7¢ Sentiment: None Disclosure: Not Held
