TORONTO (miningweekly.com) -  Shareholders in copper junior Chariot Resources on Friday morning re-elected the company's incumbent board of directors, rejecting a rival slate of nominees proposed by shareholders Lukas Lundin and Brian Edgar.

Shares in the firm slid 15% on Friday, to C$0,37 apiece by 15:51 in Toronto.

The dissident shareholders tried to have the company's annual meeting adjourned, but the meeting resumed after the movement  to adjourn was voted down in a ballot.

The board vote was reasonably close at the end of the day, with about 106-million shares voted for the management nominees and some 97-million for the dissident slate.

During the proceeds, the dissidents voiced a number of objections to the way in which the proxy vote was conducted, including that they were not allowed to examine all the proxies ahead of the announcement of the results.

Representatives of the dissidents eventually walked out of the meeting after the results of the vote were read out.

"We are very disappointed with the process," Edgar told journalists after leaving the meeting. "It's outrageous."

The dissidents are scheduled to review the full details of the proxy vote on Tuesday.

"And, if we see that the account is wrong, we will definitely be in court as fast as we can," Edgar said.

Chariot's flagship asset is a 70% holding in the Marcona, or Mina Justa, copper project, in Peru.

In campaigning to have the board replaced, Lundin and Edgar said the current group had not done enough to progress the project.

Speaking after the meeting, however, Chariot CEO Ulli Rath said he was pleased but "not surprised" by the results of the proxy vote.

Although there was only a 3% difference between the votes for the two groups of nominees, he pointed out that the large part of the vote for the dissident slate was attributable to Lundin Mining, which owns 18% of Chariot and indicated last week it would vote against the current board, although it distanced itself from the proxy challenge.

Lundin Mining, the board of which is chaired by Lukas Lundin, bought its holding in Chariot when it acquired Rio Narcea in 2007, but CEO Phil Wright said last week the company does not plan to make a bid for Chariot or its Mina Justa project.

Rath, who has accused the dissidents and Lundin Mining of trying to effect a cashless takeover without paying a control premium, said he hopes to see better relations with Lundin now that the meeting is over.

"I think after this I'm going to go see Lukas, I've known him for 20 years, and see if we can't work together on this - this is not good for the company."

'FOR SALE' SIGN?

Chariot completed a feasibility study earlier this year, and will go on to apply for environmental approval and permits from the Peruvian government.

The big question now is when Rath and his board plan to put Chariot up for sale.

He said on Friday that the company has just completed a strategic review, with RBC Capital, in which it considered either trying to fund and build the $743-million operation itself, or selling to the highest bidder.

At the end of the day, the sale route "at the appropriate time" was deemed to offer the best value for shareholders.

Rath said that the board will now sit down to determine how soon a sale process will begin.

"RBC has advised us to wait for better times, but the shareholders have told us 'get it moving'," he told reporters after the meeting on Friday.

"They would like to see us doing something sooner rather than later."

"It's still up for debate...we are going to be sitting down and reviewing that timeframe now, but obviously we are going to listen to the shareholders."

The company plans to submit its environmental- and social-impact assessment (ESIA) this month, and will then get started on securing permits for the mine, and Rath said he would prefer to have made some progress in both processes before starting to look for a buyer.

"Still, although the ESIA and permitting processes will likely take about six months, Chariot would expect to have an idea of whether the government has identified any potential problems within the first month or two," he said.

Once the ESIA approval and permits have been received, the project will be fully "shovel ready".

"We think the combination of the feasibility study, the permit and the ESIA makes a compelling package that other companies should be interested in."

Chariot Resources and its joint-venture partners, Korea Resources Corporation (owned by the Korean government) and LS-Nikko Copper, bought the Marcona property from diversified miner Rio Tinto in late 2004.

The project joint venture also signed a ten-year offtake agreement to sell up to 70% of cathode production and 90% of concentrate produced at Mina Justa to LS-Nikko.

At full capacity, the average annual production from Mina Justa is forecast at 111 000 t/y of copper in cathodes and concentrates , at life-of-mine cash costs of $0,96/lb.

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