14/10/2009 - 15:29

Chairman ramps up Troy offensive

14/10/2009 - 15:29

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Troy Resources non-executive chairman John Dow has described the battle for boardroom control as a clash of personalities that started last year, as the chance of a truce looks highly unlikely.

Troy Resources non-executive chairman John Dow has described the battle for boardroom control as a clash of personalities that started last year, as the chance of a truce looks highly unlikely.

In a briefing to journalists this afternoon, Mr Dow made his thoughts known about the boardroom battle that was launched by former chairman and current non-executive director John Jones late last month.

Mr Jones is seeking the removal of chief executive Paul Benson, founding director Alan Naylor and non-executive director Denis Clarke.

In their place, if shareholders vote for their removal in a meeting next month, will be Peter Stern, Robin Parsh and Andrew Barclay.

Mr Dow today said friction within the boardroom started to appear last year, particularly when Mr Jones stepped down as chairman in November.

"I think it's fair to say that Paul Benson and John Jones probably could never be best buddies," he said.

He said he had made a serious attempt to sort out the dispute in the week before the requisition was announced to the market, adding that as chairman, he had wanted to avoid bloodshed.

However, with a shareholders meeting scheduled for November 16, Mr Dow said shareholders will have to decide on whether they want a smaller company with less liquidity and aligned with Mr Jones, or a growing company this is able to pay dividends.

At the crux of the battle is the funding options for the $US45 million Casposo gold project in Argentina, with Mr Jones preferring the development be funded by debt so as to protect shareholders' interests.

Mr Jones, through his company Warrigal Pty Ltd, holds a 9.63 per cent stake in Troy.

Mr Dow today said the miner had explored debt funding options, having spoken to two financiers earlier this year.

However, in the then economic climate, the financiers required Troy to commit to a hedging program and other strict conditions that would have restricted the company from undertaking corporate transactions.

Mr Dow said Troy had elected not to pursue the debt financing route, quashing claims the miner could not get debt funding.

Mr Dow also described shareholding dilution claims as "nonsense", with the equity raising to be offered to existing Troy investors both in Australian and North America.

Troy plans to fund the Casposo development through a blend of equity, raised through existing Australian shareholders through a rights issue and a placement to North American investors, Mr Dow said.

A target for the capital raising has not been set.

Mr Dow said the development will also be funded through cash flow from Troy's existing mines, one in WA and another in Brazil, and a further $2 million will be realised from the full payment of partly paid shares.

He added there will be a debt component to the overall funding.

Mr Dow also stressed that financing needed to be secured by the end of the year, so that the project could be in production by late next year.

 

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