Havilah Resources’ attempt to pass a $100 million funding proposal from GFG Alliance subsidiary, SIMEC Mining, has been blocked.
The company’s technical director and majority shareholder Chris Giles, through his privately-owned company Trindal, surprised the board by voting against the proposed transaction during the extraordinary general meeting (EGM).
Giles had reportedly been supportive of the proposed transaction in his capacity as both a director of Havilah and as a shareholder.
He was one of the signatories to the agreement along with the unanimous election of the Havilah board to proceed with the proposed transaction, a company statement read.
This was the first occasion that Havilah’s independent directors had given any indication that Giles was going to vote against the resolution.
Giles has held the determining vote as the largest shareholder, despite almost 60 per cent of individual shareholders voting in favour of the proposed transaction.
“As highlighted at today’s meeting, and to make it absolutely clear to all shareholders, neither Havilah nor GFG would ever have contemplated entering into the proposed transaction unless Dr Giles had been supportive of the proposed transaction in his capacity as a director of Havilah and as a shareholder,” Havilah stated.
Havilah had planned to use the $100 million funding to advance its iron ore assets and copper prospects in South Australia.
The funding was part of a shared subscription agreement that would allow Havilah to increase its focus on the Mutooroo copper-cobalt district, near Broken Hill, providing a pathway to commercialisation at the site.
It would also potentially provide GFG with a 51 per cent stake in Havilah if all equity placements were made.
The outcome meant that Havilah’s $5 million pro-rata rights issue, which was to be undertaken as part of the proposed transaction at a discount to $0.154 a share, would no longer be proceeding.
Havilah is now required to move in a different direction to extract value from its in-ground mineral deposits.
The company hasn’t received any alternative proposal from those advocating against the transaction, despite having the transaction in the market for over four months.
Havilah will release an update in due course as to the next steps in its funding options and the company’s future.
The company is also planning a board shake-up, with the proposed appointment of two people, Victor Previn and Richard Charles Buckley as Havilah directors.
Independent non-executive chairman Mark Robert Stewart and independent non-executive director Martin Simon James are expected to finish their roles as directors.