JOHANNESBURG (miningweekly.com) – Disgruntled Simmer & Jack empowerment partner Vulisango on Monday proposed that a new Simmers board be put in place at an extraordinary general meeting (EGM) of the junior gold company.

Vulisango proposed that former Harmony Gold CEO Bernard Swanepoel be appointed as nonexecutive chairperson, along with new independent nonexecutive directors, Impala Platinum and former Simmers independent director David Brown; Aquarius CEO and former Simmers independent director Stuart Murray; and former Africa Rainbow Minerals coal division executive William Osae.

As Simmers' majority shareholder, Vulisango said that it wanted current Simmers CEO Gordon Miller and current chairperson Nigel Brunette removed, along with directors John Berry and Adrian Meyer.

Simmers confirmed, in a Stock Exchange News Service announcement, that it had received a notice calling on the company to convene an EGM of shareholders that eight new directors could be appointed to the Simmers' board.

The letter, which it said was from from the joint provisional liquidators of Xelexwa Investment Holdings, in liquidation, and from Vulisango, wanted four of the current six Simmers board members ousted.

Simmers said that it was reviewing the notice and shareholders would be informed of developments.

Vulisango said, in its media release, that is was also nominating former Iscor, Harmony and Rand Uranium dealmaker De Wet Schutte as an independent nonexecutive director, along with Nampak and Freeworld Coatings's Peter Surgey.

Further nonexecutive director nominees were former South African Chamber of Business head and former Simmers independent director Kevin Wakeford and former Simmers deputy chairperson Baba Njenje. Gerrit Jacobs and Martin Oberholster would be retained.

Vulisango CEO Valence Watson urged shareholders to exercise their democratic right as owners in the company to support the new board in the upcoming EGM.

Vulisango said that it had sent a letter to the current Simmers board as "majority shareholder" on November 13 to call for the EGM, at which it proposed that a new Simmers board be elected.

As holder of 270-million Simmers shares, Vulisango said that it had a direct interest in ensuring the long-term success.

"With a new board, we believe that the company will be able to unlock value, institute and uphold good corporate governance principles and realign executives into a performance-based culture – all to the substantive benefit of the shareholders," Watson said.

Vulisango said poor operational decisions made by the current board, including a 537% increase in administrative and overhead costs of from R45-million to R287-million, as well increases of 248% in the last three years in the salaries of the top executives.

Vulisango alleged that the Simmers board had also broken several promises, including First Uranium's alleged failure to produce 440 000 lb of uranium and 144 000 oz of gold by March 31.

Vulisango alleged that no uranium and only 53 900 oz of gold had, in fact, been produced by that date.

The company said further that there continued to be an absence of operational profit from Simmers TGME gold asset in Mpumalanga province, despite four years of promises.

Vulisango alleged that the management of the company had furthermore claimed that operations would make a profit with the gold price at R85 000/kg, which it alleged was another false claim as even at a gold price of more than R250 000/kg, the company continued to lose money.

Simmers MD gold Deon van der Mescht reassured shareholders, employees and other stakeholders that Vulisango’s media release contained inaccuracies and alleged that its empowerment partner was being "intentionally misleading".

“We will be providing more detail in this regard at our results presentation on Thursday," Van der Mescht said.

In its media release, Vulisango questioned Simmers approach to corporate governance and cited as transgressions the allegation that Simmers had an "absentee CEO"; that the CEO and chairperson held the same position for both Simmers and First Uranium; that shares had allegedly been issued without the necessary board approval, despite R1-billion cash being available; and that the board had allegedly refused to entertain proposals from Vulisango in respect of corporate actions.

Vulisango alleged further that South Africa's Department of Mineral Resources had called into question Simmers' BEE compliance, as well as correct mining-licence application procedure.

Vulisango said that it objected to the unilateral manner in which Simmers consulted with the regulator and noted that the application for the granting of a new-order licence for First Uranium's' Ezulwini Randfontein Shaft 4, had been lodged on the basis of BEE ownership of 50,1%, even though the BEE shareholding had been diluted to 44%.

"We are not against dilution of our shareholding in the company if it means growing the company, but we are against dilution if it destroys value and we believe that this has been the result of incompetent board management over the past three years," Watson said.