terramin founders look to scuttle board, page-2

An article by Meredith Booth in "Adelaide Now".

ANGRY Terramin shareholders led by former director David Paterson want to oust chairman Kevin Moriarty and three other directors.

Mr Paterson and fellow former Terramin director Colin Jackson have called for the extraordinary meeting because "the market has lost confidence" in Terramin's board and Dr Moriarty to "deliver on many of its promises".

Terramin shares spiked 10 per cent yesterday after emerging from a trading halt, but have halved in value since October 2010 when it revealed a 57-month construction time for its Tala Hamza zinc project in Algeria, which would be among the world's six largest zinc mines.

"After canvassing major shareholders, both we and they, believe the only way to restore the market's confidence in Terramin is through a fundamental change in the board structure and the long overdue appointment of a dedicated managing director," the shareholders said in a statement.

In a separate move, Dr Moriarty stepped down as executive chairman yesterday, to be replaced immediately by non-executive director Bryan Davis.

The company said Dr Moriarty, who was overseas yesterday, would continue as managing director until its key $589 million Tala Hamza project was permitted before he retired from "executive functions" within the company.

At the company's annual meeting last week Dr Moriarty said approval on Tala Hamza was "weeks away".

But rebel shareholders have had enough, after a series of meetings with a constituted committee of the board to make changes and particularly in light of Dr Moriarty's "belief that he is the only person capable of delivering the approval process for the Tala Hamza project"at the annual meeting, the group said.

They now request the removal of Dr Moriarty and non-executive directors Michael Kennedy, Bryan Davis and Peter Zachert, replaced by Mr Paterson, Mr Jackson, Australian Gold Alliance director and former Newmont Mining executive Paul Kiley and Transamine Trading director Gabrielle Moeller.

Mr Kiley represents substantial shareholder JP Morgan Chase & Co while Ms Moeller is a director of Paris-based commodities trading house Transamine which has 7.7 per cent stake in Terramin and an offtake agreement for lead and zinc concentrate from the Tala Hamza project, Mr Paterson said.

Mr Paterson believed the board would be rolled at the future meeting but did not not reveal whether the move had the support of 14 per cent investor China Non-Ferrous Metals.

"We've got significant support as I've said. We feel very confident there will be change and change that enables Terramin to rebuild the share price and focus on Tala Hamza," he said.

Remaining board members Xie Yaheng, representing CNM and Robert Jones and Steve Bonett, who had particular experience with the Algerian project, were not a target for change.

Meanwhile new chairman Bryan Davis said "this is a critical period for the company and all efforts must remain focused on the operations of the company, specifically the Tala Hamza project".

He added that the search for a chief executive was "also a high priority".

Mining engineer Greg Cochran joined Terramin in December 2009 but resigned in August last year after his role was "as contemplated by the board" was "not as envisaged by Mr Cochran".

While Terramin has estimated Tala Hamza would take more than four years to build, it is expected to produce 164,000 tonnes of zinc and 36,000 tonnes of lead per year, for 12 years.

It also owns the Angas zinc mine and Menninnie zinc project in South AUstralia.

Shares closed 3c higher to 33c yesterday.