UPDATE 1-Timmins sets up committee to respond to demand for new board

Fri Jun 6, 2014 7:07am EDT

(Adds details, background, shares)

June 6 (Reuters) - Timmins Gold Corp said it had set up a special committee of independent directors to help respond to a proxy fight launched by a major shareholder to take control of the Canadian gold miner's board.

Asset manager Sentry Investments, which owns about 17 percent of Timmins, said on Monday that the company's assets had been mismanaged and its board was not sufficiently independent.

Sentry said it planned to nominate six candidates for Timmins' eight-member board.

The asset manager had also alleged that the gold miner had ignored shareholder requests to allow potential buyers to conduct due diligence.

In its response on Friday, Timmins said that a potential suitor had been given an opportunity to conduct due diligence, but had declined to make a binding offer.

"The company remains active in exploring and pursuing opportunities to enhance shareholder value ... Should the company receive an offer, the board will, of course, consider it in accordance with its fiduciary duties," said Paula Rogers, an independent director who is heading Timmins' special committee.

The company, which owns the San Francisco gold mine in Mexico, said that Sentry had refused to compromise and had "instead threatened to launch a public proxy contest unless it accepted Sentry's demand for control of the board."

Timmins said its annual shareholders' meeting would be held on July 31. The company had said on Monday that it was seeking to postpone the meeting to Sept. 23.

The Vancouver-based miner's shares closed at C$1.72 on the Toronto Stock Exchange on Thursday. (Reporting by Sneha Banerjee in Bangalore; Editing by Saumyadeb Chakrabarty and Kirti Pandey)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.