Troy Resources directors facing an attempted board spill by a mutinous shareholder say if they go, chief Ken Nilsson will walk as well.

Republic Investment Management (RIM), a Singaporean-based shareholder with a 5.1 per cent stake, is trying to remove Troy director John Jones and chairman Peter Stern.

The pair would be replaced with directors including former Kingsgate Consolidated chief Greg Foulis, former Tiger Resources director Russell Middleton and MacPhersons Reward managing director Jeff Williams.

RIM wants to retain Mr Nilsson.

However, in a statement calling on shareholders to vote against resolutions put forward by RIM, Jones and Stern said if RIM got its way Mr Nilsson — and company secretary Gerard Kaczmarek — would also depart the company.

“The loss of Mr Nilsson, in particular, could be reasonably expected to have a materially deleterious impact on Troy,” they said.

Both Jones and Stern also noted that neither RIM nor its board nominees had yet revealed a plan for the company.

Maintaining the current board would stabilise operations at Troy’s Karouni operation, which was achieving its highest quarterly production in more than five months, they said.

Earlier this week, Troy’s besieged board had a win with its bank Investec negotiating amendments to its loan including a reduction to the September 30 repayment to $US1 million and the deferral of other repayments.

The Investec loan requires a new “Key Person covenant”, which means “it will be an event of default if any of the existing Troy directors, CEO, COO, or CFO or any equivalent person resigns or is replaced and such replacement does not have the requisite skill, knowledge and experience.

“A consequence of the new Key Person Event of Default is that, if an existing key person leaves and is not replaced by a person that is satisfactory to Investec, the facility may become repayable in full,” the board said.

“As shareholders would appreciate, no outside individual or organisation has greater knowledge of Troy, or better appreciates the Company’s position and what the Board is seeking to achieve than Investec.

Jones and Stern said shareholders should carefully consider the implications of Investec’s ability to make the outstanding loan balance immediately due and payable if there are board changes not acceptable to Investec, and whether RIM can repay the $US24 million loan balance.

While shareholders were disappointed with the performance of the company, they believed the current board should continue.

Shareholders will vote on the future of Jones and Stern at the general meeting which will be held on October 10.

Shares in Troy closed 4 per cent higher at 12c on Thursday.