Tuesday, 23 April 2013

Selwyn Resources gets shareholder approval for project sale; calls Samara Capital meeting invalid

Selwyn Resources (CVE:SWN) has said that at a special meeting on Monday, the company's shareholders approved the sale of its remaining 50 per cent interest in the Selywn project to joint venture partner Chihong Canada Mining, but the event was overshadowed by another supposed meeting held by Samara Capital. 
In a statement released Monday, president and chief executive of Selwyn, Dr. Harlan Meade said: "We are very pleased that our shareholders approved this transaction. At the meeting, a number of shareholders expressed support for the recently announced position of Samara Capital Inc. regarding the payment of a dividend. 
"The company will be updating the market on its views of the dividend and the timetable for the meeting to consider the annual meeting matters."
In a new statement on Tuesday, Selwyn said that Samara issued a press release relating to a meeting of shareholders that Samara conducted following the company's special meeting for the approval of the transaction. 
Selwyn said that it does not recognize the Samara meeting, as it was "not validly called, nor was proper notice given". Any actions taken at the meeting are therefore invalid, it added. 
The Canadian junior insisted that there has been no change in its board of directors, despite Samara's claims, and annual meeting matters will be considered at a date and time to be determined by the board. 
"The company remains open to options that upon proper and full review will result in the greatest return to and in the best interests of all Selwyn shareholders and stakeholders," it said in its statement today.
"As disclosed by the company on April 19, 2013, until such time as all shareholders are provided with additional information regarding the options available to the company, and until shareholders have voted on the annual meeting matters at a valid meeting of Selwyn shareholders, the company will not use the net sale proceeds from the transaction to fund any material capital expenditures related to the restart of ScoZinc Mine."
Dr. Meade stated his disappointment at Samara Capital's actions."We feel that all shareholders should be part of a fulsome discussion of the options available to the company, and there must be adequate time for all shareholders to be part of such discussion."
In early March, Selwyn agreed to sell its 50 percent interest in the project to its partner, Chihong Canada Mining, for a total price of $50 million. Aside from the required shareholder approvals, which it now has, the deal is also subject to the board approval of Chihong's parent company, Yunnan Chihong Zinc & Germanium Co, as well as certain Chinese governmental approvals. 
The company expects the sale to wrap up by no later than early June. Selwyn is planning to use the proceeds from the deal to repay its outstanding debt, as well as for the restart of production at its ScoZinc mine in Nova Scotia. 

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