Australian mining technology company TNG Limited, which owns the world’s most advanced vanadium project – the Mount Peake Project in the Northern Territory, is having its leadership team formally challenged by a shareholder campaign criticising the project’s setbacks and slow progression.
Perth-based company TNG Limited has found itself at the centre of a meticulously planned shareholder campaign to remove its CEO and chairman over claims the company’s leadership “does not hold the breadth and depth of experience necessary to prosper and navigate the complexities of project permissioning in the Northern Territory” and has “lost the confidence of financial markets.”
TNG owns the Mount Peake Vanadium-Titanium-Iron Project, located 230km north of Alice Springs, which is aiming to produce around 6,000 tonnes of vanadium pentoxide annually to be used for vanadium redox flow batteries.
The project is expected to become a top 10 global producer of vanadium, with the mine itself sitting alongside TNG’s proprietary TIVAN technology, which the company says allows it to “overcome limitations of the conventional processing.” It plans to build its processing facility in Darwin’s Middle Arm Precinct.
The project is in the advanced stages, having received Major Project Status from the federal Government in 2021 and finalising its front-end engineering design (FEED) study, completed by another major shareholder, Germany’s SMS Group – one of the world’s largest metallurgical engineering companies.
What the leadership challenge will mean for the Mount Peake Project is, at this stage, uncertain.
Leadership challenge
The shareholder campaign is being fronted by Australian Financial Review columnist and ex-hedge fund manager Grant Wilson, who on July 20 formally challenged the TNG board through 249D of the Corporations Act which allows significant shareholders to force the company into a general meeting, in this case to vote on the current leadership.
TNG this morning responded to the move, urging shareholders to vote against the “removal of three of its four directors.”
The company said handing control of the its board to Grant Wilson, who is proposing he himself take over as chief executive, alongside Anthony Robinson as proposed chairman, would “disrupt TNG’s recent momentum and cause unknown consequences.”
Grant Wilson holds an 8.82% stake in TNG, and is backed by Warren and Marilyn Brown, who own a 6.16% stake in the company.
The Browns appear to have also been behind another activist shareholder campaign against the company in 2018, which was described by the AFR as “highly disruptive”.
The primary criticism among the group of shareholders is the slow progress of the project, which in 2015 had promised to begin construction in 2018. This “take off” date has been setback a number of times, with the shareholder campaign on its website claiming its leadership team has “failed” to manage the environmental approval outcome in Darwin.
“Significant risks persist in the environmental approval process for the integrated operation at the Mount Peake mine site,” it adds. The campaign also criticised the company’s failure to deliver an updated capital cost estimate for the Mount Peake Project in the second quarter of this year.
Grant Wilson is currently moving through Australia holding meetings as part of the campaign “roadshow” – with the final meeting scheduled for this Friday in Perth following gatherings in Sydney, Melbourne, Brisbane and Canberra.
His move has set off an outpouring of discussion on HotCopper.com‘s forums among TNG’s minor shareholders, with some supporting the campaign to oust the leadership, who they too blame for the “plethora of missed timelines” and “stuttering progress.”
Meanwhile, others have questioned the what the radical shift would do at this stage of the project and how it would impact offtake agreements and partnerships.
TNG’s current CEO and Managing Director, Paul Burton, who is at the centre of the controversy, has also questioned whether a former hedge fund manager would have the experience to run a mining company, according to the AFR.
He also pointed out that Wilson, who has publicly described himself as the “proposed chair of TNG” has never held any role with, or acted as an advisor to, TNG. “Mr Wilson does not represent, or have any right to represent, TNG in any discussions regarding the Mount Peake Project or the business of TNG,” the company said.
TNG said it will send out notice of a general company meeting discussing the issue “no later than 10 August 2022.”
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