Following our AGM, how is the EGM looking.  Here is my...

Following our AGM, how is the EGM looking.  Here is my thoughts.

There are 218,249,000 shares on issue (per annual report).

There were 110M votes cast for a number of the AGM resolutions.  Therefore, about a 50% turnout rate.  However, exclude Giles who holds 42M or 19%.  Therefore, about 38.5% of the remaining shareholders took enough interest to vote.

Of the resolutions that Giles did not vote on, it was about 60% against.  Therefore, the majority of the shareholders excluding Giles could be assumed to pass the EGM resolutions.

Those that Giles voted for, passed with around 70M votes in favour and 40M against.  That means that the EGM needs another 30M votes to pass (or to get Giles on side).  

Around 95M votes were cast by proxy.  Which means for those that were there, they cast around 15M votes.  Comparing the resolutions that Giles did not vote for, there were around 10M votes on the day that were often in favour of the existing board.  (Do those supporting the EGM know who the 5M that were there and voted with current management and could they be turned?)

However, the majority shareholders are really the key.  They hold 58% between them.  Which means they did not all vote today.  The question is, which ones didn't.  For this analysis, I assume that anyone who voted, voted the same way for all of their shares.

The second largest shareholder is Glencopper SA (I understand a Glencore subsidiary).  They hold 10,153,756 with no change for the last few years I looked at.  Not looking to increase their holding - so may not be supportive of the current board.  If I remember rightly, they got these shares after a disagreement as to the number of shares they should be awarded.  If they voted, they voted by proxy.  Would be interesting to know if they voted.  They could be part of the 18M that voted for the remuneration report by proxy.  It would be the "safe" thing for a large corporate to do.

The largest shareholder is First Names (Jersey) Limited.  Jersey is a small island and tax haven in British Channel.  First Names appears to be an organisation that would manage trusts for others, often wealthy.  They have been increasing their shareholding from 12M in 2016, 17M in 2017 and just under 20M in 2018.  Therefore, they are active and would have an interest in the outcome.  If they voted, they would have needed to be part of the 33M voting against by proxy.  That means that they did not vote for the current board and management.  The EGM guys should know how many proxy votes they had and work out if First Names voted or not.  

First Names could be one individual or family managing their own money held in their Jersey Trust.  It could be a fund manager managing money for others.  Either way, I suspect the best financial outcome is what they will be interested in.  Their vote will be important and the right case should be put to them.

I think the EGM will go to whoever has the best case.

For the existing board to get up, I think they need lock in their next director and that needs to be a real heavyweight.  They have had six months, so not sure how they will go.  If they don't deliver on a new director, or the director they deliver doesn't have much credibility, then that could be a big mark against them.

For those bringing the EGM to get up, they need to work hard on finding out who has not voted and bringing them on board.  They also need to find out who the 30M shareholders are that voted with the current board, and see if any of them can be converted.  They also need to get the inactive shareholders to vote.  

In my mind, the best way to win votes will be to lay out your plan for success. 

The current board and management have presented their plan at the AGM.  It didn't win me.  I have concerns over their ability to deliver on any objectives.  One of the key objectives is the Kalkaroo PFS.  That was meant to be the end of this year.  It now looks like September 2019.

At the moment, the EGM has support among many hot copper posters - but this is mainly a vote against the current board and management.  To win some more support, those behind the EGM should more clearly lay out their plan for the future.  How will they deliver value to shareholders by unlocking value from existing projects and further developing other projects.  And how do they plan to fund their objectives.

Interesting times.