DENVER, April 22, 2013 /CNW/ - Resource Capital Fund IV L.P. ("RCF IV") and RCF Management LLC (together with RCF IV, "RCF") commented today on the outcome of the April 22, 2013 meeting (the "Meeting") of the shareholders of Selwyn Resources Ltd. (TSXV: SWN) ("Selwyn").
RCF is pleased to report that Selwyn shareholders, including RCF, voted to approve the special resolution with respect to the sale of Selwyn's remaining 50-per-cent interest in the Selwyn zinc and lead project to its joint venture partner, Chihong Canada Mining Ltd. (the "Sale Transaction").
Selwyn shareholders holding a total of approximately 264.9 million Selwyn shares, or approximately 67% of the total issued and outstanding Selwyn shares were represented in person or by proxy at the Meeting. Of the 264.9 million Selwyn shares represented at the Meeting, approximately 74% or 195.9 million Selwyn shares (or 49.7% of the total issued and outstanding Selwyn shares) are held by shareholders who seek a distribution of the net proceeds of the Sale Transaction.
It was a surprise to RCF, and seems significant, that all of the three independent directors and the Corporate Secretary of Selwyn were absent from the Meeting. This follows the resignation earlier of Selwyn's fourth independent director, A. Jay Collins. With only the two management nominees on the Selwyn board of directors present at the Meeting, Harlan Meade, CEO and President of Selwyn, acted as Chairman.
Representatives of the Company's four major shareholders (RCF, Korea Zinc, China Mining and Transamine) attended the Meeting in person and supported several motions that would allow the shareholders to proceed with the other items of business that were set out in the original Notice of Meeting dated March 22, 2013, including voting upon the election of directors. Despite such motions having been supported by shareholders representing more than 74% of the Selwyn shares represented at the Meeting and more than 49% of the total issued and outstanding Selwyn shares, the Chairman refused to allow such motions to be voted upon.
By disallowing the motion to proceed with the other proper business of the Meeting, Selwyn has effectively denied shareholders holding approximately three quarters of the Selwyn shares represented at the Meeting and one-half of all Selwyn shares, the right to vote in favour of nominees who commit to distributing the net proceeds from the Sale Transaction to all shareholders. As noted in RCF IV's April 19, 2013 press release, the cash generated from the Sale Transaction with Chihong will net in excess of C$40 million after repayment of the Waterton debt facility. RCF believes that there are ample funds to provide a tax-efficient distribution of C$0.10/share to shareholders immediately after closing and still provide working capital for the company to find new shareholders to fund the development of ScoZinc.
Given Meade's lack of independence and repeated refusal to act judiciously and to allow the motions proposed by the shareholders, Samara Capital proposed a motion to appoint an independent Chairman for the balance of the Meeting. Again, in a further act of entrenchment, Meade declined to allow the motion to be voted upon.
Despite multiple requests by shareholders to proceed with the other business of the Meeting, the Chairman purported to terminate the Meeting immediately after the approval of the resolution in support of the Sale Transaction.
Following the Chairman's alleged termination of the Meeting without having addressed the other proper business for which the Meeting was called, shareholders holding 74% of the shares represented in person or by proxy at the Meeting voted, amongst other things, to elect Benedict Cubitt, Justin Oliver, Jeremy Link, David Kwong and A. Jay Collins as directors for the ensuing year.
RCF is currently the largest shareholder of Selwyn Resources and owns approximate 17.1% of the common shares of Selwyn.
SOURCE: Resource Capital Funds IV L.P.
For further information:
AJ Goodman, [email protected]