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KBL questions motives behind Kidman’s board spill attempt

20th November 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed KBL Mining has questioned the motives behind shareholder and lender Kidman Resources’ call to have the entire KBL board removed.

Kidman earlier this week called for a KBL shareholder meeting after KBL chairperson Jim Wall adjourned the company’s annual general meeting (AGM). Kidman defended the attempted board spill, saying it was taking the action in order to protect its own interest as a shareholder, and as a debt holder.

Kidman obtained the A$12.6-million KBL debt by way of a transaction with Capri Trading earlier in November.

However, in a statement on its website, KBL pointed out that prior to Kidman obtaining the debt, the company had been in discussions with Capri Trading regarding refinancing of the debt to accommodate financing which was expected to also fund the development of the Mineral Hill mine, in New South Wales.

KBL had apparently also been in discussions with Kidman itself regarding possible cooperation opportunities at the Mineral Hill mine, which lies adjacent to Kidman’s own tenements.

The company told shareholders this week that it had been “surprised” by Kidman’s move to obtain the KBL debt and a shareholding in the company.

KBL further pointed out that since the debt acquisition was announced, an unusual and unexplained volume of KBL’s shares have been traded, depressing the company’s share price.

Kidman was now proposing that Wall and nonexecutive director Greg Starr, as well as MD Brian Wesson and nonexecutive director Bob Besley be removed from the KBL board, to be replaced by Tony Davis, Melanie Leydin and Mark Muzzin.

In fact, Kidman had approach a number of KBL’s other shareholders in an effort to gain support for voting against resolutions at the AGM to reappoint both Wall and Starr, KBL said.

However, KBL noted that in being provided voting power at the AGM, Kidman could be considered to have an undeclared conflict of interest, as the company was both a substantial shareholder in KBL and a lender.

KBL pointed out that the economic interest of Kidman may well be best served by hampering KBL’s ability to raise financing to pay off its debt and to fund the Mineral Hill operation.

The A$12.6-million debt now owed to Kidman was secured against all of KBL’s assets, including its operating Mineral Hill base metals mine and its Sorby Hills lead/silver deposit, in Western Australia.

Kidman had rebuffed KBL’s efforts to restructure the debt, and full payment remained due by March next year.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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