Mount Gibson Iron has announced the appointment of two new directors as the company’s board grapples with a continuing rift over the independence of its chairman Geoff Hill.
Experienced mining executive Russell Barwick, who has previously worked for Placer Dome and Newcrest Mining, and consulting engineer Paul Dougas, who was formerly managing director of SKM, have agreed to join the board.
Mr Hill told today’s annual meeting the company was continuing to search for a further independent director, to replace retiring Perth-based director Ian Macliver.
He added that the board was still aiming to have a majority of independent directors.
However, the board is in the extraordinary position of not agreeing on whether Mr Hill is independent, despite Mr Hill taking a highly unusual step to try and prove his status.
“I am aligned to no one and I signed a statutory declaration to confirm my independence,” he told shareholders.
The stat dec did not sway former chairman and current director Craig Readhead, managing director Luke Tonkin and Mr Macliver, who “do not consider that Mr Hill can be classified as independent”, according to a note in Mt Gibson’s annual report.
The issue of board independence arose after two Chinese groups, Shougang and APAC Resources, acquired large shareholdings, when they effectively rescued the company during the GFC.
Prominent Perth company director Neil Hamilton resigned as Mt Gibson chairman at last year’s annual meeting, following discussions with the Chinese groups.
Shougang and APAC both supported Mr Hill’s election as chairman, and they each have two representatives on the board.
One of those directors, Alan Jones, was re-elected today with support from just 64 per cent of proxy votes.
Mr Hill fared better, being re-elected as a director with 86 per cent of proxy votes.
He told the meeting that strategic planning has not been top of mind in the recent past, because: “as they say in the classics, it’s hard to focus on draining swamps when you’re up to your arse in alligators”.
However, the board has held one strategy sessions, and agreed to exploit its strong financial position – it has virtually no debt and $400 million in cash.
It will focus on maximising returns from its existing iron ore mines in the Mid West and Kimberley, and will seek opportunities in iron ore, coking coal and potentially copper.
Mr Hill said the company is open to growth through exploration, joint ventures, asset purchases, or mergers & acquisitions.
Mr Tonkin told the meeting that the company’s “methodical and conservative” growth strategy was paying dividends, with its rail and port capacity through Geraldton set to reach 6 million tonnes.
“This will fulfill our needs in the next five to seven years,” he said.
Mr Tonkin repeated his view that the Oakajee port project, just north of Geraldton, was “very unlikely, very late and will cost a fortune”.
