This morning, after a month of battling, Timmins Gold (TMM:TSX) and their 17% dissident shareholder, Sentry Investments have come to an agreement on the composition of the company's Board of Directors. After Sentry proposed a new slate, the investment fund that manages over $14 billion in assets accepted Timmins' proposed Board of seven nominees as long as they could nominate one member themselves.
The Board of eight nominees now includes: George Brack, Bruce Bragagnolo, Bryan Coates, Stephen Lang, Luc Lessard, Paula Rogers, Jose Vizquerra Benavides (all from Timmins) and Anthony Hawkshaw (Sentry's nominee).
Kevin MacLean, Senior Vice-President and Senior Portfolio Manager at Sentry said, "Timmins Gold has assembled an excellent group of experienced and independent mining industry professionals to guide the Company. I congratulate the Company and the Special Committee for its efforts, the high quality of its nominees and its willingness to take Sentry's objectives and concerns into account."
Added Bruce Bragagnolo, Timmins Gold's CEO, "With this agreement we can move forward without the expense and distraction of a continuing proxy contest. We will continue to execute on and evaluate Timmins Gold's business strategy, which has delivered superior performance and shareholder return."
Timmins owns the San Francisco mine in Sonora, Mexico which has been in production since 2010 and has since expanded from 10,000tpd to 24,000tpd. It produced 120,000 ounces in 2013.
Despite increasing the mine life and production capacity, investors and analysts alike have applied a discounted multiple to the shares of the company owing to the fact it only operates one mine.
The meeting of Timmins' shareholders was set for July 31st, but clearly Sentry was happy with the changes Timmins made. The wake-up call the initial proxy battle provided has appeased their need for a proxy battle. Sentry was not pleased with Timmins' performance and their inability to find and execute an accretive deal(s).
Accusations came out that Timmins' Board was entrenched and unwilling to sell the company, despite such transactions being in the shareholders' best interests.
Argonaut Gold is rumored to be interested in acquiring Timmins.
Whatever happened with the company in the past, this shakeup looks to be the most positive outcome as it creates a fresh Board that has a lot of deal experience (George Brack was an investment banker at Macquarie for years, Bryan Coates was former CFO of Osisko and now President of royalty spinout, Anthony Hawkshaw is the founder of Rio Alto and former CFO of Pan American Silver, the world's largest pure play silver company).
Shares were lifted over 40% after Sentry announced its intentions, although they are down slightly today (despite gold remaining near the $1330/oz mark):
Read: Timmins Gold Announces Settlement With Sentry Investments