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* Cornerstone rejects SolGold bid, looks to replace board
* Some SolGold shareholders concerned about funding methods
* SolGold CEO says can fend off call to cull board
(Updates with detail from call, details)
By Shanti S Nair and Shanima A
July 15 (Reuters) - Canada's Cornerstone Capital Resources
Inc said on Wednesday it would urge SolGold Plc
shareholders to replace the company's entire board, a day after
rejecting the UK-listed miner's takeover offer for a second
time.
Cornerstone has an 8% stake in SolGold, making it the
BHP-backed company's fourth-biggest
shareholder.
"The current SolGold Board is incapable of managing the
affairs of SolGold for the benefit of all shareholders in a
prudent and transparent manner," said Greg Chamandy, chairman of
Cornerstone, in a statement.
At the centre of SolGold's public spat with two of its
largest shareholders are concerns it is raising money for its
mammoth Ecuador copper-gold project using inefficient and
expensive methods.
In May, SolGold announced a financing package of up to $150
million and a $15 million bridge loan with mining financiers
Franco-Nevada Corp to develop its Alpala project.
Cornerstone's Chamandy said the proposed royalty financing
would destroy value for all SolGold shareholders, echoing
comments by SolGold's second largest investor Newcrest
Cornerstone said it expected a new SolGold board to review
the terms of the Franco-Nevada financing package and possibly
terminate the deal if it was not in the best interests of
SolGold and its shareholders.
SolGold CEO Nick Mather said the call to remove the
company's board was "unnecessarily destabilising", adding he was
not sure of the motivation but was "confident of defending such
an attack".
He was speaking on a webinar to try to convince Cornerstone
shareholders to take an all-stock offer made in late June of 11
SolGold ordinary shares for each Cornerstone share.
An earlier proposal was also rejected by Cornerstone in 2019
on the grounds that it undervalued the Canadian company.
Mather urged Cornerstone shareholders to "accept the premium
bid". He added the Franco-Nevada deal was on favourable terms
and was fair for all shareholders. Franco-Nevada declined to
comment.
Cornerstone said on Tuesday about 65% of its shareholders
would not support SolGold's second offer.
Shares in SolGold were up 4% by 1425 GMT.
(Reporting by Shanti S Nair and Shanima A in Bengaluru, Zandi
Shabalala in London and Jeff Lewis in Toronto; Editing by Amy
Caren Daniel and Mark Potter)
