Division among the board of New Talisman Gold Mines has forced the cancellation of a capital raising.
File image. Photo: 123rf
The listed company has cancelled a $3.1 million rights issue to existing investors because of "differing views" and "discord" amongst the company's reconstituted board.
"The board met on 7 October for a lengthy discussion on these and other matters and reached the conclusion that the reconstituted board are no longer confident that the strategy outlined in the Rights Offer document can be fulfilled in a timely manner, as was anticipated by the previous board," it said in a statement to the NZX.
The capital raised from the share issue were intended to go towards the company's main asset, the Talisman mine near Waihi.
Small shareholders, backed by the Shareholders Association, recently supported the election of outsider and company critic John Upperton to its board at its annual meeting.
It was a move sparked by growing discontent with the company's performance and current governance, the Shareholders Association said at the time.
They also blocked the reappointment of Kelly Wyse and backed successful, but non-binding, motions for the resignation of New Talisman's chief executive Matthew Hill and chair Charbel Nader.
The board was further rocked yesterday by the immediate retirement of another director, Murray Stevens.
The Shareholders Association, which has been supporting the small shareholders, said the motions passed at the recent annual meeting have given the company a strong message.
"Any board would need to go through a period of re-building, alignment and soul-searching after receiving such a resounding message from their shareholders," NZSA chief executive Oliver Mander said.
"The content of today's announcement demonstrates that this process is underway, although there is clearly some way to go."
However, he expressed surprise that the rights offer had been cancelled given the company's cash position.
The Financial Markets Authority is currently taking court action against Matthew Hill for alleged market manipulation.