TORONTO, June 24 (Reuters) - The board of Timmins Gold Corp is standing behind the company’s management but plans to shake up its own ranks in the midst of a proxy fight with top shareholder Sentry Investments.
Timmins announced four new independent board nominees on Monday, and said five of the current eight directors will not run for re-election at the company’s July 31 annual meeting.
Sentry owns about 17 percent of Timmins, a small Canadian-based gold producer. It is running a dissident slate of six nominees, and has criticized the company’s management.
Timmins director Paula Rogers, who heads a special board committee struck to respond to Sentry, said the company’s nominees would create a board “for all shareholders”.
“We’re looking at, really, industry veterans,” she said. “At the same time we’re able to preserve the experience and the knowledge of the current management team, which would be lost if the dissident is successful.”
Sentry has assailed Timmins management for failing to “clearly define a strategy” to boost the company’s value or use capital efficiently. Timmins owns the San Francisco gold mine in Mexico. In the first quarter it produced 36,000 gold equivalent ounces at cash costs of $703 per ounce.
“We believe in our management team,” Rogers said. “The current management, the CEO and the president, they built the mine on time and on budget, and they’ve delivered over 400 percent shareholder return since the IPO in 2006.”
Timmins’ new board nominees include George Brack, a former investment banker who also worked in corporate development for gold miner Placer Dome, which was taken over by Barrick Gold in 2006; and Bryan Coates, who was chief financial officer of Osisko Mining Corp until it was acquired earlier in June.
It is also nominating two mining engineers: Stephen Lang, current chairman and former chief executive of Centerra Gold Inc , and Luc Lessard, who worked on the design and construction of Osisko’s flagship Canadian Malartic mine.
Timmins President Arturo Bonillas is one of those leaving the board, but he is set to remain president, the company said. (Reporting by Allison Martell; Editing by Peter Galloway)