TORONTO (miningweekly.com) – Canadian miner Timmins Gold on Friday said it had established a special committee to oversee its response to dissident shareholder Sentry Investment’s proxy solicitation and the company’s process of board renewal.

TSX- and NYSE-listed Timmins, which owns the San Francisco gold mine in Mexico, asserted that it was constantly engaged in board renewal, arguing that the incumbent board had a record of achieving deliverables such as bringing the San Francisco mine to production on time and on budget.

Sentry, which owns about 17% of Timmins, on Monday said that it strongly believed that the lack of board independence, a lack of management accountability and the mismanagement of the assets had unnecessarily eroded shareholder value. 

Sentry alleged that soon after it had informed Timmins of its intent to nominate six directors to the current eight-member Timmins board, for election at the July 17 annual general meeting (AGM), the board had cancelled the meeting. Timmins on Monday said it had applied to the TSX to reschedule the meeting to September 23.

Further, Sentry also alleged that Timmins had ignored potential suitors access to its data room to conduct due diligence.

Timmins on Friday denied the claim and revealed that a potential buyer had indeed been given exclusive access to its financial information, but had declined to make a binding offer.

"The board is always willing to consider transactions that would benefit the company and all of its shareholders but, to date, the company has not received a binding takeover bid from any party.

“The company remains active in exploring and pursuing opportunities to enhance shareholder value and has entered into a number of confidentiality agreements pursuant to which interested parties have been granted due diligence access to the company. Should the company receive an offer, the board will of course consider it in accordance with its fiduciary duties,” chairperson of the special committee Paula Rogers said.

Timmins said in discussions with Sentry last week, Sentry had refused any compromise and threatened to launch a public proxy contest unless Timmins accepted Sentry's demand for control of the board.

Timmins on Friday confirmed that the AGM would be held on July 31.

Timmins’ shares were trending lower on Friday, losing almost 7% in morning trading to C$1.60 apiece.