LONDON (Alliance News) - Nyota Minerals Ltd Thursday said it plans to try to rebuild trust with its shareholders by allowing them to consider appointing a new board at a meeting to be held next month, but warned one or all of its existing board will leave if any new directors are appointed.
The London-listed mining company said shareholder activism has prevented the board from progressing new opportunities and conceded no new opportunities can be chased until the ongoing issues have been resolved.
Numerous shareholders, including Nyota's two largest shareholders, filed requests earlier this year to remove Chief Executive Richard Chase and Executive Director Michael Langoulant, signalling the start of a dispute between Nyota and its investors.
Nyota responded and has since removed Chase from his role as chief executive, but he remains a non-executive director of the company and is also still a director of some subsidiaries whilst Langoulant has remained in his position.
Previously, Nyota had said the requests filed by shareholders to hold an extraordinary general meeting were invalid but the company agreed to hold a meeting once details were provided about the directors that shareholders were proposing to join the board.
On Thursday, Nyota said it plans to hold a meeting on May 25 to allow shareholders to consider appointing new directors to the board, but said "one or all" of the existing directors will resign if any new directors are appointed to the board as a result, suggesting there could be a potential mass exit depending on the shareholder vote.
The only other board member of Nyota apart from Chase and Langoulant is Non-Executive Evan Kirby, which had his technical consultancy contract terminated by Nyota in March.
"The directors considered a number of opportunities in the mineral exploration and other sectors during the period. However shareholder activism has had an adverse impact on the board's ability to progress discussions on new potential investment opportunities as illustrated by the termination in early March of detailed discussions with a third party in relation to a potential new FinTech [financial technology] opportunity," said Nyota on Thursday.
"Unless and until the composition of the board has been resolved and shareholder support restored, the company's ability to progress new business opportunities has been destabilised and that has resulted in the decision to call a shareholder meeting," the company added.
Away from the ongoing disruption, Nyota provided an update covering the first quarter of 2016.
The company said it has received a report on the data that was collected by the versatile time domain electromagnetic (VTEM) airborne geophysical survey over its main Ivrea nickel and copper project in Italy.
That report has confirmed the priority target at the project is a 5.0 kilometre long conductivity anomaly that hosts the old nickel mine workings at Alpe di Laghetto, La Balma and Campello Monti and a parallel positive magnetic anomaly that appears to define the host rock for mineralisation at those old workings, the company said.
Importantly, Nyota has made applications to modify the licence areas that make up the project based on the results of the survey, but those applications remain pending. Nyota said it has been advised that requisite public consultation meetings will be held early in the second quarter of 2016.
Nyota plans to take the next step at Ivrea by computer modelling the data from the VTEM survey over that main Alpe di Laghetto target and by conducting possible ground geophysics on the ground to refine the target before beginning to design a drill programme and applying for the necessary permits.
However, Nyota said this work has been "postponed for the time being," without providing a reason, but it is likely because of the pending licence applications or the potential board restructuring.
Nyota, which owns a 70% stake in the project, added that "no unnecessary new expenditure" was committed to Ivrea during the first quarter of 2016.
At the end of the first quarter, Nyota had a cash balance of only AUD300,000 after the company conducted a placing early in the year of 375.0 million shares priced at 0.05 pence each to raise GBP187,500.
Nyota shares were trading down 9.8% to 0.0902 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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