Days after Teck Resources Ltd. publicly pulled the plug in February on Frontier, a proposed $20.5-billion mine in the oilsands, one of the company’s largest investors started a campaign to oust the company’s chief executive, Don Lindsay.
Bob Bishop, founder of Impala Asset Management, a Florida-based resource focused hedge fund, which has been a shareholder since 2016, wrote a letter in late February to the board; and then a few days later, just before coronavirus halted all air travel, he flew to Toronto to deliver his message in person to the company’s chair Sheila Murray: It’s time for Lindsay to go.
For Bishop, whose firm owned 1.9 per cent of Teck’s Class B shares at year end, oil was proving to be another mistake in a long line of miscalculations: Teck invested $1.1 billion in Frontier, one of the largest greenfield oil projects ever imagined in Canada, before it abruptly withdrew from the permitting process.
Separately, it invested $6 billion in the Fort Hills mine — operated by Suncor Energy Ltd. — with only about $54 million in EBITDA to show for it, according to Bishop’s calculations.
Now, as oil prices hit record lows, Lindsay has said the company may sell its 23.1 per cent stake in Fort Hills. “This whole oilsands strategy has just been a complete disaster,” Bishop told the Financial Post.