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Metal Tiger rips into Kingsgate Consolidated and calls for boardroom coup

Michael McNeilly, Metal Tiger’s chief executive, said: “KCN is in urgent need of board renewal"
picture of boardroom
Kingsgate needs a boardroom clear-out reckons Metal Tiger

Metal Tiger plc (LON:MTR) has slammed the board of Aussie miner Kinsgate Consolidated and called a meeting to replace all but one of the directors.

Michael McNeilly, Metal Tiger’s chief executive, said: “KCN is in urgent need of board renewal.

“The incumbent board has overseen a massive destruction of shareholder value and failed to articulate a clear strategy going forward.

READ: Metal Tiger increases shareholding in Kingsgate

“The board of Metal Tiger shares the view that they are not the right team to lead KCN in its current situation."

Metal Tiger has recently buit up a 6.7% stake in Kingsgate, which has lost more than 90% of its value over the past five years.

Thailand's only gold mine

Kingsgate owns the Chatree mine 200 miles north of Bangkok in Thailand, which has just had a suspension order from the Thai government lifted.

Chatree is Thailand’s only operating gold mine but has faced complaints from local residents over a number of environmental and health issues.

The Thai authorities suspended operations at the mine at the end of 2016, but lifted the ban in August.

According to reports in Bloomberg, restarting the mine is expected to cost over US$50mln.

Call to change board

Company law in Australia allows a shareholder with 5% of the votes to request that the board of KCN convene and hold the shareholder meeting.

Kingsgate’s board has 21 days to call the meeting, which has to be held within two months of the initial request.

Metal Tiger wants five new directors appointed to the KCN board including three of its directors: Michael McNeilly; Terry Grammer; and Mark Potter plus two independents it has nominated: Richard Warburton and Neville Bergin.

“Metal Tiger has decided to take this action in order to both preserve and enhance the value of its shareholding,” McNeilly added.

The Aim-listed group is developing its own mine in Thailand, the Kemco silver-lead-zinc project, which it is hoping to list separately..

In a later statement, McNeilly spelt out the reasons why it had called the meeting

In particular, it highlighted the  closure of Chatree, the long running dispute over Chatree's closure and the inability to reach a satisfactory resolution; the breakdown of relations with the Thai authorities and that Kingsgate had become a 'finance-hungry litigation and exploration and development company'.

The only director Metal Tiger has not called to remove is Peter Alexander, who has considerable mining industry experience, can positively contribute to the new board it said.

It added that Neville Bergin is a mining engineer with extensive experience accumulated over four decades in the mining industry, while Richard Warburton is one of Australia's most experienced board members. 

He has chaired or been director of public, private and government boards including a chief executive of Dupont Australia and New Zealand.

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October 01 2018

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