As Robert Giustra sees it, the management team at Eastmain Resources Inc. is really entrenched there wasn’t any reason to even chance a friendly approach to the company.
“The overwhelming consensus was that many others have tried and been averted, there was no point,” the chairman and leader of Columbus Gold Corp. said in an interview.
Columbus launched a proxy fight against Eastmain, a fellow junior miner, on Monday. It’s an unusual example in Canada of 1 public company attempting to unseat the board of some other. In most cases, activists or frustrated long-term shareholders launch these battles.
But Giustra, who is a cousin of mining finance guru Frank Giustra, argued that this was the best option. He isn’t thinking about a formal takeover bid, partly because he asserted not enough data is available on Eastmain’s Clearwater gold project. While Giustra thinks the Quebec project provides extensive promise, he assumed Eastmain would block any request to determine the private data.
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Instead, he hatched a bold intend to replace Eastmain’s directors at next month’s annual meeting, after which quickly open the organization for a potential takeover or other transaction. Columbus could get involved with this method, but Giustra said there is no guarantee.
Eastmain CEO Don Robinson dismissed Giustra’s claims as utter nonsense. He explained that Toronto-based Eastmain provides data with other interested parties, and that he would be pleased to discuss opportunities with Columbus.
“I would state that it’s our fiduciary duty to make sure we look whatsoever opportunities that come our way. So where (Giustra’s allegation) originates from, I am unable to tell you,” he explained.
The war of words makes way for what could be an ugly fight. And there might be more of these in the future in the junior mining space soon. With gold prices improving this year, juniors are emerging from a long period of hibernation and searching for new opportunities.
Robinson and the wife, Catherine Butella, have run Eastmain for roughly 2 decades. Giustra claims they’ve collected hefty salaries while failing to advance the Clearwater project in a reasonable pace. He noted that Eastmain continues to be referring to the work since a minimum of 2002, but has not even completed a feasibility study on it up to now.
Robinson noted that although Eastmain has owned the Clearwater task for many years, it just was a focal point for the company this year, when it made a key discovery on the site. He added that it’s a highly complex project and requires a lot of drilling.
Assuming no settlement is reached, Giustra said he’s confident Columbus will win this proxy fight. He claimed that Eastmain’s institutional investors support his plan.
“I don’t think it will likely be a fight, to be completely candid,” he said. “The disenchantment (from shareholders) runs deep.”
pkoven@nationalpost.com
Twitter.com/peterkoven
