UPDATE 1-Sherritt files proxy, urges rejection of dissident's nominees

Mon Mar 31, 2014 6:44pm EDT
 
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(Adds details, activist investor comment, share price move)

By Euan Rocha

TORONTO, March 31 (Reuters) - Canadian miner Sherritt International Corp on Monday urged its shareholders to back its slate of nominees for the company's board of directors over a slate put forward by activist investor George Armoyan.

Sherritt filed its proxy circular on Monday, and in a letter to investors Chairman Harold Stephen assailed Armoyan as someone with no experience in Sherritt's lines of business, and said Armoyan has a poor track record on corporate governance matters and no credible new ideas for creating value beyond what management is already doing.

Armoyan is chief executive of Clarke Inc, a Halifax, Nova Scotia-based investment holding company listed on the Toronto Stock Exchange.

The announcement came just after Sherritt, a nickel, oil and gas producer, completed a visit with analysts and investors to its key growth project, the Ambatovy nickel mine and plant in Madagascar. Analysts came back with largely positive views on Ambatovy's prospects, and on Monday a flurry of positive research reports sent shares of the company up 9 percent to C$3.86 on the Toronto Stock Exchange.

"In our view Ambatovy is poised for significant improvements in production and we expect that this will lift a veil of uncertainty that has overhung the share price for the past five years," TD Securities analyst Greg Barnes said in a note to clients.

Barnes, who raised his share price target to C$4.50 from C$3.50 and boosted his rating to "buy" from "hold," said the company's plan to pay down part of its outstanding debt is also a positive catalyst.

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