(Adds details, activist investor comment, share price move)
By Euan Rocha
TORONTO, March 31 (Reuters) - Canadian miner Sherritt International Corp on Monday urged its shareholders to back its slate of nominees for the company's board of directors over a slate put forward by activist investor George Armoyan.
Sherritt filed its proxy circular on Monday, and in a letter to investors Chairman Harold Stephen assailed Armoyan as someone with no experience in Sherritt's lines of business, and said Armoyan has a poor track record on corporate governance matters and no credible new ideas for creating value beyond what management is already doing.
Armoyan is chief executive of Clarke Inc, a Halifax, Nova Scotia-based investment holding company listed on the Toronto Stock Exchange.
The announcement came just after Sherritt, a nickel, oil and gas producer, completed a visit with analysts and investors to its key growth project, the Ambatovy nickel mine and plant in Madagascar. Analysts came back with largely positive views on Ambatovy's prospects, and on Monday a flurry of positive research reports sent shares of the company up 9 percent to C$3.86 on the Toronto Stock Exchange.
"In our view Ambatovy is poised for significant improvements in production and we expect that this will lift a veil of uncertainty that has overhung the share price for the past five years," TD Securities analyst Greg Barnes said in a note to clients.
Barnes, who raised his share price target to C$4.50 from C$3.50 and boosted his rating to "buy" from "hold," said the company's plan to pay down part of its outstanding debt is also a positive catalyst.
"CUT THROUGH THE NOISE"
"The issues we have with the (dissident) nominees are laid out in the circular, but basically they have no international experience, mining experience, or large processing experience - the kind of skills that we were looking for," Stephen said in an interview with Reuters.
He urged shareholders to "cut through this noise, consider the qualifications of each group of director nominees and determine which directors will act in the best interests of Sherritt and all of its shareholders."
Sherritt is to hold a special shareholders meeting on May 6 to elect its board. The meeting was requisitioned by shareholders affiliated with Armoyan, including Clarke, which together beneficially own some 5 percent of its shares.
Sherritt said it is gaining momentum with a disciplined strategy to pay down debt, cut costs and focus on its core areas of expertise, but said the dissident slate threatens to weaken its governance and disrupt its momentum.
In a statement late on Monday, the activist investors said the company's claims around progress being made are the direct result of recommendations made earlier by its group.
"The fact is that Sherritt would not have shifted its stated focus from acquiring assets to debt reduction without the advocacy of the concerned shareholders," Armoyan said in a statement. "Sherritt would have no claim to a 'disciplined strategy' without our intervention."
The activist group also berated Sherritt for "irresponsible personal attacks" on its nominees, without knowing for certain, who its final list of nominees will be. The group said it would name its nominees in the next few days. (Reporting by Euan Rocha; Editing by Peter Galloway and Leslie Adler)