Roxgold Cancels Shareholder Meeting in Order to Quash Proxy Fight from “Dissident Shareholder”

The world of smallcap Venture Exchange stocks rarely has a proxy fight worth covering, but Roxgold is now an exception to that rule.  If you have not read the last couple of press releases regarding the “Shareholder Meeting” that was scheduled for July 12, you have seriously missed out. Let’s put this all into perspective. First a chart. The stock has moved up sharply:

Clearly there are people trying to acquire shares of Roxgold very aggressively.  They have pushed the price up sharply, with volume in the millions the past couple of days.  While that chart looks great, look at a 12 month chart and you begin to see why there are some unhappy shareholders.

 

As you can see, the stock was over $2 just weeks ago, and it was more than eight months ago since the stock was solidly under a dollar. 

Remember – it was just in February that this announcement came out: Roxgold Named Top Overall Company in TSX Venture 50 for 2012.  Long before that, the company had a “shareholder rights plan.”  I can only assume this is related.

The reason “I care” is that I always pay real close attention when different parties want to take control of a company.  It usually shows me someone on the outside thinks something is very valuable, and they want to run the show.  Despite being names “Top Overall Company in TSX Venture 50″ for this year, apparently Oliver Lennox-King thinks his nominated team could do better?  We are not at all the judges here, and really have no say or interest in this proxy issue.  It just makes me really interested in looking closer at shares of this stock.

What does Mr. Lennox-King see?  Obviously the management intend to hang on.

Let’s read from their releases.  Mr. Lennox-King issued the first release. We will quote it in part, and link off to the full copy on our StockGuru Mining web site:

Mr. Lennox-King also announced today that he currently holds proxies from Roxgold shareholders that, together with Mr. Lennox-King’s shares, represent an aggregate of 34,764,730 Roxgold common shares or approximately 28.5% of the issued and outstanding shares entitled to vote at the Roxgold meeting. Mr. Lennox-King announced that such proxies were previously obtained by way of private solicitation of a limited number of Roxgold shareholders in compliance with all applicable securities laws.

“I am seeking to improve Roxgold’s performance. With the newly strengthened board in place, I am confident in our ability to stop the rapid erosion in shareholder value we all have suffered over the last four months and get back to creating meaningful returns for our shareholders”, Mr. Lennox-King said. “In my view, an exciting discovery has been undermined by poor stewardship by the incumbent administration and has resulted in a lack of market confidence.”

Another interesting quote inMr. Lennox-King’s release:  

“Serious execution deficiencies relating to the advancement of Roxgold’s flagship Yaramoko gold project in Burkina Faso, including: a persistent assay backlog which has compromised timely feedback for guiding drilling and regional exploration activities and inadequate initiatives to address this backlog; lack of systematic, scientific approach to drill hole sequencing, including unnecessary high risk “Hail Mary” type wide step-out holes; and a lack of timely initiation of other critical project evaluation and community engagement activities…”

It goes on, and gets more personal regarding the management.  Again – we are not the judges here. See that FULL RELEASE HERE.

Now, Roxgold put this one out just this morning:

Roxgold Inc. (“Roxgold” or the “Company”) (ROG.V) announces that the Company has decided to postpone the annual meeting of shareholders of the Company (the “Shareholder Meeting”) scheduled for July 12, 2012. The Company has determined that a postponement of the Shareholder Meeting is necessary to protect the interests of all shareholders of the Company. On Monday, July 9, 2012, one day prior to the last day that proxies could be submitted for use at the Shareholder Meeting, a press release was put out by Oliver Lennox-King, (the “Dissident Shareholder”) nominating an alternative slate of directors for election at the Shareholder Meeting. The Company had not been actively soliciting proxies for the upcoming meeting given that it believed that there would be no contested issues and in order to conserve cash. As the dissident press release was issued only one day before the voting cut-off, the board of directors has determined that it is in the best interests of all shareholders of the Company that they have ample opportunity to consider the issues raised by the Dissident Shareholder and to determine whether they will participate in what is now a contested election. Postponing the meeting will allow all shareholders to make an informed decision, and enable the Board to engage the dissident group in a constructive manner. The Company will announce the new meeting date on July 10th.

The Company issued a bit of a defense to the “dissidents” giving some details on progress they have made:

Despite difficult market conditions, since completing the acquisition of its package of properties in Burkina Faso in October 2011 the Company has made great strides in advancing its flagship Yaramoko property. The Company reported on April 23, 2012 that it has engaged AGP Mining Consultants of Toronto to provide shareholders with an independent resource estimate calculation of its Yaramoko gold project in Burkina Faso, for inclusion in an updated 43-101 compliant technical report. This estimate is approaching completion and the Company has been informed that it will be provided in July 2012, the product of approximately 100,000 meters of drilling. The results of this work will, in great part, dictate the course of events for Roxgold. Current management believes that the interruption of this process through a proxy battle would be detrimental to the interests of all Roxgold shareholders.

READ THE FULL RELEASE HERE

 We’ll keep following this one. When the Company puts out the new date, we should see some strong demand between today and when the market last trades before that meeting!

EXTRAS:

FYI – Mr. Lennox-King’s Background from Businessweek: 

Mr. Oliver Lennox-King, BComm Co founded Vaaldiam Mining Inc. (formerly Tiomin Resources Inc.) and served as its President from 1992 to 1997. Mr. Lennox-King has over 30 years of experience in the mineral resource industry in financing, research and marketing. He has 21 years of senior experience in the mining industry with involvement in marketing and administration. He co-founded and served as the Chief Financial Officer of Southern Cross Resources Inc. from 2001 to July 9, 2003 and Chief Executive Officer from July 9, 2003 to September 4, 2003. Mr. Lennox-King served seven years in Marketing and Administration with senior Canadian resource companies. From 1980 to 1992, he was a mining analyst in the Canadian investment industry. From 1972 to 1980, he worked in metal marketing and administrative positions at Noranda Inc. and Sherritt Gordon Ltd. He was an Equity Analyst of BofA Merrill Lynch, Research Division and Citigroup Global Markets Japan Inc., Research Division. He was Research Analyst of Trinity Trading Company, Ltd. He co-founded Pangea Goldfields Inc. and serves as its Chairman. He serves as the Chairman of Fronteer Development (USA) Inc. and has been its Director since 2003. Mr. Lennox-King serves as the Chairman at Aurora Energy Resources Inc. He has been Chairman of Fronteer Gold Inc. (Formerly Fronteer Development Group Inc.) since 2003. He served as an Executive Chairman of Southern Cross Resources from 1997 to September 4, 2003 and also as its Non-Executive Chairman since September 4, 2003. He has been a Director of Teranga Gold Corporation since October 6, 2010. Mr. Lennox-King has been a Non-Executive Director of Gippsland Offshore Petroleum Ltd. since July 3, 2009. He has been a Director of Aurora Energy Resources Inc. since February 2006, CGX Energy Resources Inc. since March 1997 and Fronteer Gold Inc. since November 2003. He serves as a Non-Executive Director of Xdm Resources Inc. He served as Director of CGX Energy Inc., from December 20, 1996 to May 4, 2012. He served as a Director of Mineral Deposits Ltd. since November 29, 2007. He served as a Director of Unisphere Waste Conversion Ltd. until February 9, 2005. He served as a Director of Hornby Bay Mineral Exploration Ltd. since March 9, 2004 and DNI Metals Inc. since 1991. Mr. Lennox-King served as a Director of Southern Cross Resources Inc. He served as a Director of Dumont Nickel Inc. since 1991. He served as a Lead Director of Aurora Energy Resources and for Fronteer since 2003. He served as a Director of Metallica Resources Inc. from May 1998 to June 22, 2007 and Vaaldiam Mining Inc. (a/k/a Tiomin Resources Inc.) from March 1992 to June 2007. He served as a Director of UNOR Inc. since March 9, 2004. He served as a Director of Pangea Goldfields. Mr. Lennox-King holds a Bachelor of Commerce degree from the University of Auckland, New Zealand.   (READ THE FULL SOURCE HERE)

Press Releases Mentioned in this Article:

Roxgold Inc. Announces Postponement of Shareholder Meeting Scheduled for July 12, 2012

Shareholder Issues Release, Challenging Roxgold’s Management

Roxgold Named Top Overall Company in TSX Venture 50 for 2012

Breaking News: Roxgold Adopts Shareholder Rights Plan (Really?)