Concerned Shore Gold shareholders renew quest...These were the fun old days...
A group of concerned Shore Gold Inc. shareholders are raising money to fund a legal battle after the Saskatoon-based diamond exploration and development company rejected their latest attempt to shake up its board of directors.
The SGF Shareholders Association Inc. (SGFSA) plans to challenge the company’s refusal to publish and allow shareholders to vote on a proposal that two directors of its choosing be appointed to the board, according to the association’s chairman.
“We need to go to court and have a judge do two things,” David Wright said. “One, interpret the wording and intent of the law, and two, make a judgment whether or not … Shore must in fact publish our shareholder proposal.”
Shore Gold staked its first claim in the Fort la Corne forest in 1995. It wants to build a diamond mine consisting of two large open pits and a processing plant on the property, known as Star-Orion-South, about 60 kilometres east of Prince Albert.
The SGFSA was formed in 2012 and consists of “progressive” investors representing “well above 10 per cent” of the company’s 294 million shares, who are concerned about its direction and efforts to communicate with its shareholders, according to Wright.
Members of the group came close to blocking the appointment of three Shore Gold directors at a tense meeting last June. Wright said the proxy vote was a shot “aimed at the wheelhouse.” Shore Gold’s chairman deemed it illegal but allowed the results to stand.
“We felt it appropriate that we have some direct say on their board of directors,” Wright said of the SGFSA’s proposals, which were filed this year and subsequently rejected based on differing interpretations of the Canada Business Corporations Act (CBCA).
Shore Gold President and CEO Kenneth MacNeill said Tuesday that the board is “always” looking at representation, and that while he and shareholders wish the company could be more transparent, public firms are bound by laws governing communications.
“I don’t see this as a hard stance,” MacNeill said of the company’s position. “I see this as we are following the (CBCA) rules and regulations that we need to follow … We’ve certainly responded very robustly to this and explained this to them.”
Meanwhile, Shore Gold is updating its “conservative” 2011 feasibility study. MacNeill did not provide a timeline but said it will “significantly” reduce capital costs and make the mine more attractive to potential financiers, joint venture partners and purchasers.
Shore Gold vice president of exploration and development George Read said the updated study will include better geological information, cheaper and more effective processing technologies and more efficient methods for opening the massive pits.
The company is also waiting for the province to finish consultations and issue environmental approval for the project. The province declined in January to say when a decision would be rendered. Shore Gold received approval from the federal government in 2014.
As that work continues, the SGFSA will canvass its members for the money it needs to pursue its case. Wright said the association simply wants to get its proposal in front of every Shore Gold shareholder and allow them to vote on it.
“I’m very hopeful that we will be able to raise the funding to mount that challenge, and I’m also very confident that we will win that challenge when in fact we do mount it,” he said.
