ACCRA, Jan 13 (Reuters) – Hearing of a case in which four shareholders of troubled Ghanaian mining group Ashanti Goldfields Ltd are seeking the removal of existing directors was adjourned on Thursday until January 19.
Ashanti’s general manager of corporate affairs, James Anaman, told Reuters that the minority shareholders, who are also demanding the sale of mining assets, had asked for the adjournment so they could better prepare their case.
The disgruntled investors are seeking an extraordinary shareholders meeting and in the meantime want a restraining order preventing directors from taking on more debt.
Ashanti has said it will “vigorously defend” the action against the four investors — led by Adryx Mining and Metals Ltd — who hold 4.2 percent of Africa’s third largest gold producer.
Michael Martineau of Adryx told Reuters in London that the adjournment was “constructive,” adding that Ashanti was already changing tack in the face of his group’s legal challenge.
Ashanti said earlier this week that it had started talks with a number of gold mining companies interested in acquiring a joint venture stake in its prized Geita project in Tanzania.
“The company has begun to take precisely some of the actions we asked for,” Martineau said.
But a board shake-up was still required, following last year’s financial crisis, precipitated by huge gold derivatives losses, which nearly pushed the company into default, he said.
BIDDERS LINE UP FOR GEITA
Several major gold mining companies have expressed keen interest in the Geita gold project, with Canada’s Barrick Gold Corp believed to have submitted a $200 million bid for a 50 percent stake in the mine, according to industry sources.
Geita is particularly valuable to Barrick since it is close to its recently acquired Bulyanhulu gold deposit in Tanzania, opening the possibility of operating the two deposits as one major mine.
Other serious contenders for a half share in Geita include AngloGold Ltd and Placer Dome Inc.
Ashanti hopes to start production at Geita at the rate of 500,000 ounces a year in the third quarter but it needs $110 million to bring the mine into production.
FURTHER EXTENSION BY BANKS?
Ashanti is currently in talks with its banks on the possibility of taking on a fresh $100 million loan.
A standstill agreement with the banks, who agreed last year to exempt Ashanti from margin call payments on derivatives, is scheduled to expire on Thursday night — but the deadline is widely expected to be rolled over as talks continue.
Adryx and the other dissident investors say Ashanti would not need to saddle itself with more debt if it clinched the speedy sale of half of Geita.
The company argues its needs the loan to keep work on Geita on track.
Shares in Ashanti, floated at $20 each in 1994, tumbled last year following news of its derivatives losses and as plans for a bid by 32 percent shareholder Lonmin Plc at $7 a share unravelled.
The stock was last trading in New York at $3-5/8.
