Cameron England The Advertiser February 27, 20133:43PM
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CARPENTARIA Exploration is facing a second battle over control of its board, and by implication control of the company's Hawsons Iron Project.
Silvergate Capital has called a requisitioned general meeting, available to shareholders with a cumulative stake of more than 5 per cent, in a bid to knock four of the current directors, including executive chairman Nick Sheard, off the board.
A similar vote, targeting just two directors, Dr Neil Williams and Paul Cholakos, was held in November, with both being re-elected.
The votes are a de facto battle over the Hawsons iron ore project, just over the border in New South Wales, which aims to export iron ore through Port Pirie.
The project was a joint venture with Bonython Metals Group (BMG), however BMG was placed in liquidation after a legal dispute between former chief executive John Hillam and Silvergate's Wilson Cheung.
BMG's 40 per cent stake in Hawsons, which Mr Cheung retains his stake in, was placed on the market as ordered by the Federal Court.
Pure Metals put in a bid for the BMG stake, but Carpentaria says that company is financially supported by Silvergate.
Carpentaria has a pre-emptive right to buy the BMG stake at the same price as the $3.25 million in cash offered by Pure Metals, and plans to do so.
But Silvergate is attempting in the meantime to dominate the Carpentaria board with its own nominees.
Mr Heard said such a move would be to the detriment of other shareholders.
"Should Silvergate be successful in removing four members of the existing board, they will be in a position to promote their interests above those of other shareholders and erode significant opportunity and value to your investment," Mr Sheard says in a letter to shareholders.
"Despite their clear conflict of interest in relation to decisions regarding the pre-emptive right and renegotiation of the Hawsons Iron Project joint venture, there will be no one on the board representing non-aligned shareholders' interests to hold them to account.
"Should Silvergate wish to control the Carpentaria board and the pre-emptive right over the joint venture, then they should offer a fair price to all shareholders."
Silvergate's nominees are Mr Cheung and Eric Walsh.
Silvergate currently owns 18.79 per cent of Carpentaria.
The general meeting will be held on March 27.
Carpentaria shares closed steady on 18.5c. - See more at: http://www.adelaidenow.com.au/business/carpentaria-in-new-board-stoush/story-e6frede3-1226587020246#sthash.B33mmCNM.dpuf
