A bitter battle for control of Canada’s Guyana Goldfields (TSX: GUY) between the miner and dissent shareholders led by founder and ousted chairman, Patrick Sheridan, has been finally settled this week, costing the company’s head his job.
As part of the agreement, the Toronto-based miner is appointing two new independent directors to the board — Alan Pangbourne and Allen Palmiere — with other two long-serving independent directors stepping down, it said in the statement.
Guyana Goldfields said it would implement a succession plan for the role of chief executive officer, currently held by Scott Caldwell, who has agreed to stay as president and CEO while the search is underway.
The mid-tier gold producer has been under pressure due to the performance of its flagship and only operating mine following a sudden resources review.
In March, the company shocked the market by announcing that the amount of gold in proven and probable reserves at its Aurora mine in Guyana had declined by almost 1.7 million ounces, compared to estimates a year ago.
The company attributed the unexpected “evaporation” of gold reserves to the adoption of “a new and more appropriate mine model,” which eliminated a previous “ineffective dual reporting” structure.
During the proxy battle, Caldwell repeatedly blamed the flawed figures on “aggressive assumptions,” which he said were based on a 2012 model developed when Sheridan was chief executive.
Sheridan replied by saying the changes were a mere tactic to divert attention from the company’s poor operational performance.
Since that day in late March, Guyana Goldfields’ share price has declined almost 27%, last trading on Tuesday at 96 Canadian cents, down from C$1.32.
The miner’s current market capitalization is sitting at almost C$167 million.