terramin founders look to scuttle board

Terramin founders look to scuttle board

Monday, 30 May 2011
Tania Winter

A BOARD spill is unfolding within Terramin Australia, with two of the company�s founding directors, David Paterson and Colin Jackson, calling a special meeting of shareholders to remove four directors.

One of the key resolutions to be put forward in the July 20 meeting will be the removal of existing executive chairman Dr Kevin Moriarty, along with directors Michael Kennedy, Robert Bryan Davis and Peter Zachert.

Their proposed replacements will include Paterson and Jackson, who collectively own a little more than 5% in the company, 6.5% shareholder Transamine�s Gabrielle Moeller and mining consultant Paul Kiley.

A committee of non-executive directors comprising Steve Bonett, Robert Jones and Xie Yaheng has been established to convene the meeting.

In the meantime, Moriarty, who holds a 5.09% stake, has agreed to step down as chairman, with Davis taking over the role, but will continue to act as managing director until the $US579 million ($A541 million) Tala Hamza project in Algeria is permitted before retiring.

Jackson told MiningNews.net the actual shareholders requisition meeting request was made on May 20, and the proposal, as outlined in Terramin�s announcement to the Australian Securities Exchange today, had been seriously modified.

Subsequent to the meeting request Terramin was placed in a trading halt on May 23 and voluntary suspension some two days later.

�The only thing the company has responded to is the separation of the two roles of executive chairman and managing director, which is frankly corporate governance 101 and [it] should not have taken a shareholders requisition meeting to achieve what is really a basic element of good corporate governance for any company,� Jackson told MNN.

He would not elaborate as to what other proposed changes were put forward by the disgruntled shareholders as to the structure of Terramin.

However, in an address to shareholders last week Moriarty acknowledged the search for a chief executive had been a long time coming, with a recent candidate walking away from the role given the lack of certainty on approvals for Tala Hamza.

�It may surprise some shareholders that I have been seeking a chief executive for the company since early 2007 and the board is of the opinion that we are unlikely to attract a suitable candidate until we have more traction on the Algerian project,� he said.

�If our zinc assets were fully prices into the market value of the company, there would be sense in looking at M&A activity, but not now.

�Now we need a leader who will put in patient and diligent work to develop mines and cash flows from our projects.

�We have been advertising and using recruitment companies, and recently made a generous offer to a promising candidate, unfortunately with the lack of certainty on approvals for Tala Hamza, he decided to go elsewhere.�

He said what at first appeared to be a straightforward development at Tala Hamza, gradually revealed itself in more and more complexity.

�Even so, our internal and consultant engineers are a very �can-do� lot and assured us that the project would be manageable,� Dr Moriarty added.

�Currently our government partners are reviewing the DFS [definitive feasibility study] through their consultants, while we have been holding discussions with the community and government authorities to enable efficient start-up of the project once approvals have been received.�

Earlier this month the governor of Bejaia province in Algeria requested a meeting with Terramin Australia and its JV partners to discuss their plans for the project.

The DFS outlined an initial 15 year mine life to 2027 based on a 4 million tonne per annum operation producing 370,000 tonnes of zinc and lead concentrates grading up to 53% zinc and 16,000t of lead.