Mount Kellett Capital Management, a 20% shareholder in Baja Mining (TSX:BAJ), has escalated the war of words between the two companies by demanding the resignation of Baja CEO John Greenslade following a damning announcement of cost overruns at Baja's Boleo project.
"John Greenslade should immediately resign as a director and officer of Baja. Due to his actions a tremendous amount of shareholder value has been destroyed. Mr. Greenslade has operated the company as a personal fiefdom with no regard for proper disclosure or good governance and the huge decline in the Company’s stock price is a consequence," Mount Kellett stated.
"Having lost the support, and received the resignations, of six independent directors in just the last 12 months, it is undeniable that shareholders require immediate and credible management of their company."
Baja Mining (TSX:BAJ) dropped by as much as 38% on Monday on 15 times usual trading volumes, after announcing its Boleo copper-cobalt-zinc project in Mexico will now cost $1.143 billion to construct, a 21.5% increase.
It was also announced on Monday that three directors have resigned from the company, leaving a board of only three. Mount Kellett says in its press release that it wants the Baja board reconstituted:
"We also call for the immediate reconstitution of the Board of Directors to include Messrs. Lorie Waisberg and Stephen Lehner, the two independent director candidates previously nominated by Mount Kellett, and to add two experienced independent directors satisfactory to Mount Kellett and other significant shareholders."
Mount Kellett also demanded the release of the report outlining the projected $246 million in cost overruns at Boleo:
"It is critical that all shareholders better understand the predicament that Baja faces to make an informed judgment on their investment," the company said.
Apart from the snags with construction of Boleo, Baja has also been involved in a bitter – and very public – boardroom dispute with Mount Kellett, which has pumped $80 million into Baja. Mount Kellett acccuses Baja CEO John Greenslade of “enriching family and friends” at the expense of shareholders.
For its part Baja called Mount Kellett a wolf in sheep’s clothing wishing to do a takeover of the company by stealth.