JOHANNESBURG (miningweekly.com) – Resource Generation (Resgen) on Tuesday confirmed requests by major shareholder South Africa-based investment fund Altius Investment Holdings for the removal and replacement of the ASX-listed coal explorer’s board of directors.
Altius subsidiary Shinto Torii, which held a 10.7% stake in the owner of the Boikarabelo coal mine development, requested a shareholder meeting to have the four current directors sidelined owing to a perceived risk of the project stalling or being delayed.
Shinto proposed in its 249D request issued on Monday that South Africans Lulamile Xate, Dr Konji Sebati, Robert Croll and Leepeestswe Molotsane, as well as Australians Denis Gately and Colin Gilligan replace Geoffrey Rose, Stephen Matthews, Paul Jury and Brian Warner as directors to advance the $480-million, 745-million-tonne project in Limpopo.
With the asset at a “critical juncture”, a funding solution was required urgently; however, despite efforts over the past four years, the company’s pursuit to secure the $400-million required to complete the mine and related infrastructure had failed, placing the project at risk of stalling and falling into long-term delay.
In June, the company had believed it was close to an in-principle agreement with a club of financiers on a term sheet for a multi-layered funding package, which, together with other funding commitments, would have provided the necessary finance.
However, Resgen said that a weakened API4 coal price had hampered the finalisation of the agreement.
Resgen was also seeking quotes from mining contractors to establish whether a contract-mining model could reduce the mine’s costs and capital requirement, while other sources of finance were being explored.
Altius noted that a lack of local board representation in South Africa, with local knowledge, influence and support, had also hampered funding efforts.
“The future of the project depends on effective strategic direction and oversight from a board with diverse experience, including local South African representation,” the company pointed out.
“[Altius] believes that a new board comprising experienced and talented Australian and South African individuals is best placed to secure the required debt funding, supervise the construction and oversee management of the working mine.”
This emerged less than a week after Resgen assured it had the required expertise and had appointed external consultants to assist with the challenges experienced at Boikarabelo after funding partner the Noble Group requested the appointment of additional directors to the boards of the company and its black economic-empowerment subsidiary Ledjadja Coal.
Resgen said it would defer its November 4 annual general meeting until later in November to accommodate both meetings on the same day.