After months of mudslinging and threats of court action, Canadian mining company, Guyana Goldfields Inc. and a group of concerned shareholders have been able to reach an amicable settlement.
Since January, Northfield Capital Corporation’s Robert Cudney, Donald Ross, Gretchen Ross, and Patrick Sheridan, who together own just about five percent of Guyana Goldfields had accused the current board of losing over CDN$1B (US$733M) in shareholder value due to a series of reckless decisions. They also accused the company’s executives of misrepresenting or incompletely disclosing the reasons for poor results.
In light of these and other allegations, the shareholders called for an immediate change of the Board. But Guyana Goldfields dismissed the said claims. In fact, the company exposed just recently, how Sheridan during his time as Chief Executive Officer of the company in 2011, engaged in several transactions which saw him acquiring two prime assets of the mining company. He also owes the company millions of dollars for trades he should not have engaged in during his tenure.
A special meeting was supposed to be held on May 22 to address the issues with all shareholders. But that will no longer be necessary since Guyana Goldfields has caved to the requests of the concerned shareholders, one of which includes a reshuffling of the Executive Board.
As part of the settlement between the two parties, the company will appoint two experienced mining executives, Alan Pangbourne and Allen Palmiere, to join the Board as independent directors, and two long-serving independent directors will step down.
The Chair of the Board, Rene Marion said that the two new directors will add valuable experience to the Board, and pave the way for all parties to move forward and devote full attention to the company’s optimization strategy for its Aurora Gold Mine in Guyana.
Further to this, the company agreed to replace Chief Executive Officer, Scott Caldwell as requested by the concerned shareholders. Sheridan and his associates had threatened this week to take the company to court had it failed to do so.
Guyana Standard understands that the Board’s CEO succession plan involves the establishment of a CEO search committee consisting of independent directors Ms. Saint-Laurent (Chair), Mr. Pangbourne and Mr. Marion. The CEO search committee will undertake to identify a new CEO for the company within six months. Caldwell has agreed to continue to serve as President and CEO while the search is underway.
In addition to this, Guyana Goldfields will be reimbursing the shareholders for expenses incurred during their proxy contest. The company has also separately agreed with Mr. Sheridan to resolve certain outstanding claims.
Pleased with the “constructive” outcome, Patrick Sheridan said, “This settlement coupled with the changes already undertaken by the company achieves our objective of positive change, specifically as it relates to reconstituting the Board and management.”
He added, “The new Board and a new CEO will provide the fresh approach needed to optimize operations and enhance shareholder value. I would like to thank all of the shareholders who expressed support for positive change and I am sure I speak for everyone when I say that it’s time to get down to work.”
