Ousted Guyana Goldfields founder pushes for overhaul of board and management – by David Ebner (Globe and Mail – January 3, 2019)

https://www.theglobeandmail.com/

A battle for control of Guyana Goldfields Inc. is looming as the ousted company founder seeks to replace the miner’s board of directors and management.

Patrick Sheridan and several other investors on Wednesday announced their proposal for a new board to oversee changes at the struggling gold miner. The Toronto-based company’s market capitalization fell by more than two-thirds in 2018, from about $900-million to less than $300-million. The company, which operates a gold mine in Guyana, twice cut its production forecast and also twice announced its benchmark costs had climbed.

“It’s clear change is needed,” Mr. Sheridan said in an interview. Mr. Sheridan, who was removed from his post as executive chairman last July, put forward six new directors to replace the current seven-person board at a special meeting of shareholders. He said his group will propose a new management team soon. Mr. Sheridan does not plan to become a director or executive again.

Mr. Sheridan owns 6.8 million shares of the company, about 4 per cent. His group together owns more than 5 per cent of the shares. A key player in the dispute will be Boston hedge fund giant Baupost Group, helmed by billionaire Seth Klarman. Baupost has been the largest investor in Guyana Goldfields for several years and early last fall increased its stake by 2.3 million shares to 26.1 million shares, 15 per cent of the company.

A Baupost Group spokeswoman declined to comment on Wednesday. Mr. Sheridan said he had not yet been in contact with the hedge fund. Guyana Goldfields management says it has the backing of its largest investor.

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