PERTH (miningweekly.com) – The tug-of-war between ASX-listed Kidman Resources and KBL Mining continued on Wednesday, with Kidman withdrawing the request for a shareholder meeting of KBL to appoint three new directors to the company’s board.

Kidman, which is a major shareholder in KBL, told shareholders on Wednesday that it had made the decision to withdraw its request on the basis that it did not want to place its nominees in a position where they would be joining a board while there was uncertainty regarding KBL’s ability to refinance its existing debt, and to adequately fund itself.

Kidman acquired a A$12.6-million KBL debt from Capri Trading last year, which 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.

Since then, the company has made significant waves for KBL, including attempting a board spill and launching litigation against KBL and two of its directors in an effort to prevent a noteholder meeting in which KBL would have amended the terms for its convertible notes.

KBL on Wednesday welcomed Kidman’s decision to withdraw its request for a shareholder meeting, but insisted that had the meeting proceeded, the proxies received to date would have been more than sufficient to defeat Kidman’s proposed appointments.

Kidman has meanwhile questioned KBL’s ability to raise new funding, after the company earlier this month amended a share purchase plan (SPP) to raise cash in the near term.

An initial SPP, under which shareholders were offered the opportunity to apply for up to A$15 000 of KBL shares, at a price of 3.6c a share, was cancelled on January 8, with KBL instead instituting an SPP priced at the lesser of 3c a share or the volume-weighted average market price of KBL shares over the last five days on which share sales were recorded before the shares under the SPP were issued, less a 15% discount.

The company said at the time that the new SPP was necessary as the company’s closing price on the ASX had been less than 3.6c a share since the SPP was launched in November.

KBL said that a significant influence on the share price had been the “opportunistic” selling of KBL shares by Kidman Mining, with Kidman’s shareholding in KBL reducing from 9.64% to 7.73%.

Kidman on Wednesday questioned the need for the SPP, as KBL in December announced the signing of a term sheet for about $21-million in new funding with a North American-based fund.

The funds would be used to repay the Kidman loan and to finance its assets.

A final due diligence and legal arrangements for the funding would be completed shortly, and the financial close of the transaction had been earmarked for the end of January.

“The company’s refinancing arrangements are well advanced and will fund significantly improved operations at Mineral Hill, and enable repayment of the Capri/Kidman debt,” KBL said.