The financial affairs of Canadian mining conglomerate, Guyana Goldfields Inc., seem to be moving from bad to worse. In January last, the company was lambasted in the local media by a group of concerned shareholders for losing over CDN$1B (US$733M) in shareholder value accumulating since 2016. In just a few days, the company lost even more — CDN$60M (US$44.8M) in shareholder value to be exact.
Specifically, Northfield Capital Corporation’s Robert Cudney, Donald Ross, Gretchen Ross and Patrick Sheridan, who own five percent of the shares of the Canada based company, are of the firm view that this damning market reaction was triggered by the company’s release of its new Life Of Mine plan and technical report in late March.
The Life Of Mine plan and technical report provide disclosure on the company’s updated mineral resource and mineral reserve estimates.
The Concerned Shareholders said, “From March 26 — the day the Company announced its Fourth Quarter, 2018 and 2018 full-year results and its new Life of Mine Plan — to March 28, share price dropped 14.4%. On March 29, upon the company’s release of its technical report, share price dropped another 10.2%. In other words, another $60 million in shareholder value was destroyed in just a few days.”
Further to this, the shareholders said that on April 3, 2019, the company’s shares closed at below the $1.00 mark for the first time in five years. Based on public filings, significant institutional shareholders of the company have recently sold over 20 million shares representing approximately 12% of the outstanding shares.
Sharing his views on the matter was Patrick Sheridan, one of the largest shareholders, founder, and former Executive Chairman of Guyana Goldfields.
He said, “The market has clearly lost confidence in the board and management of Guyana Goldfields and shareholders are voting with their feet. The Company is in a tailspin and no one there has shown an inclination or ability to pull back on the throttle and put the Company back on track.”
He added, “None of the actions the board has taken in the past year —including adding new directors and management, adding or commencing new development — has halted the value destruction. How bad does this need to get? Immediate change is needed.”
Sheridan and the other shareholders noted that a review of the recent actions of the current board and management to fix the problems they have created, clearly demonstrate their corrective actions are only serving to compound the problem and destroy more shareholder value.
