Concerned Shore Gold shareholders fail to oust directors at annual meeting

SASKATOON The chairman of a Saskatoon-based diamond exploration and development company says he hopes a decisive voting result at its annual meeting signals that the “frustration and dissatisfaction” expressed by some dissident shareholders is a thing of the past.

Brian Menell spoke moments after Shore Gold Inc. shareholders voted to change the firm’s name to Shore Diamond Corp. and elect to its board eight directors — including five incumbents — recommended by management.

“I think the source of frustration for many of our shareholders in the past has been the slow pace of finding a solution to move the project forward,” Menell said after the meeting. “We’ve now found a solution to move the project forward.”

That solution is an option agreement worth up to $75 million over seven years, which could result in a Rio Tinto Group subsidiary earning a 60-per-cent stake in Shore Gold’s Star- Orion South diamond project east of Prince Albert.

The meeting was expected to mirror the company’s 2016 event, in which the SGF Shareholders Association Inc. — a group concerned about the company’s direction — came within a few percentage points of unseating three Shore Gold directors.

That did not happen. Although the company deemed some of the proxy votes present at the meeting illegitimate and did not allow them to stand, Menell said that “wouldn’t have made any difference anyway” to the final tally electing the eight directors.

SGF Shareholders Association chairman David Wright said after the meeting that with around 90 per cent of voting shares at the meeting out of the association’s hands, the concerned shareholders had little expectation of a positive result. “This was pretty much largely what we thought was going to happen today — no surprises here,” Wright said, noting that the association will ask its members what its next steps should be at a meeting sometime this fall.

The nearly two-hour event ended with a question-and-answer session during which Shore Gold CEO Ken MacNeill and senior vice-president of exploration and development George Read struck an upbeat tone about the company’s prospects.

They said Shore Gold, which has been trying to build a diamond mine in the Fort a la Corne forest since 1995, remains committed to working with Rio Tinto and significantly reducing the mine’s capital cost — estimated in 2011 at $2.5 billion.

Shore Gold is also waiting for environmental approval from the Government of Saskatchewan, and it is not clear when that will come. The federal government granted environmental approval for the massive open-pit mine project in 2014.

“My enthusiasm is increased as a result of the fact that we have got a big partner with the will, the appetite and the capacity to, in partnership with us, develop a producing mine in Saskatchewan,” Menell said of the recent deal with Rio Tinto.

Shore Gold is expected to publish the voting results, including those proxies that were deemed illegitimate, Thursday.