'Massive destruction': Kingsgate's biggest investor moves to spill board

The saga that is Kingsgate Consolidated continues with its board under threat from being rolled by its biggest shareholder.

The ASX-listed gold explorer (ASX:KCN) has a lot on its plate including a legal stoush with the Thai government and its insurer.

Now AIM-listed investment group Metal Tiger is seeking to oust Kingsgate directors Ross-Smyth-Kirk, Sharon Skeggs and Peter Warren.

“The incumbent board has overseen massive destruction of shareholder value and failed to articulate a clear strategy going forward,” Metal Tiger chief Michael McNeilly told shareholders.

“Kingsgate is in urgent need of board renewal,” he said.

Metal Tiger currently holds 6.65 per cent of Kingsgate and is the only Kingsgate shareholder with more than 5 per cent.

Kingsgate's share price over the past five years. Source: Investing.com — Kingsgate’s share price over the past five years. Source: Investing.com

Metal Tiger is nominating three of its directors Michael McNeilly, Terry Grammer and Mark Potter and two independent candidates Dick Warburton and Neville Bergin to replace the Kingsgate board.

Current Kingsgate director Peter Alexander isn’t subject to the spill but has advised he will resign if Metal Tiger is successful in taking control.

A meeting request for shareholders to vote on the board spill was received by Kingsgate late yesterday. The meeting needs to be held within two months.

“The board of Metal Tiger shares the view that they are not the right team to lead Kingsgate in its current situation,” Metal Tiger chief Michael McNeilly said of the current directors.

No alternative plans

However, Kinsgate’s exec-chairman Mr Smyth-Kirk was having none of that, telling shareholders current directors “have extensive experience in Thailand and Chile and have been and continue to vigorously prosecute the interests of your company”.

“Neither Metal Tiger nor any of its nominees to the board have articulated any alternative plans for the company,” he said.

News of the board spill comes after Kingsgate kicked off legal proceedings against the Thai government to recover “substantial” losses suffered from the premature closure of its Chatree gold mine last year.

Chatree was closed after the Thai government decided not to renew the metallurgical licence after 2016. Kingsgate’s lease for Chatree was due to run to 2028.

The decision was based on unsubstantiated reports of environmental damage and public health impacts due to the operation.

Kingsgate stated on numerous occasions that the claims were false.

The company has also begun legal action over a $US200 million ($255 million) political risk insurance policy it was denied when Chatree was closed.

Metal Tiger invests in undervalued and/or high potential exploration or development opportunities.

Its key project interests include the large and highly prospective Kalahari copper/silver belt in Botswana and the highly-mineralised Extremadura region in Spain.

Kingsgate shares were trading 2c lower at 43.5c in early Thursday afternoon trading.