Wesdome delays shareholder meeting in response to Resolute Funds complaint

TORONTO – Wesdome Gold Mines (TSX:WDO) is postponing its annual meeting by up to four weeks in response to a last-minute complaint by its largest shareholder, Resolute Funds.

Resolute Funds said Monday it doesn’t think Wesdome’s leadership is capable of addressing issues at the Eagle River gold mining complex in northwestern Ontario near Wawa.

It’s raised concerns about a significant increase in Wesdome’s cash depletion during the first quarter, compared with the third quarter of 2015 when the company produced 14,484 ounces of gold from the Eagle River operation.

Wesdome reported last week that the complex produced 8,036 ounces of gold in the first quarter, down 21 per cent from a year earlier, and 2016 annual production is expected to be at the low end of an estimate ranging from 54,000 to 60,000 ounces.

The Toronto-based company says it will now hold its annual meeting by June 14 and its board has assigned chief executive Rolly Uloth and two independent directors to recommend a response to the issues raised by Resolute Funds.

Wesdome shares closed Monday at $1.61, down four per cent, giving the company a total market value of about $208 million.

“The current board and management have created significant value for all of the company’s shareholders, including Resolute,” the company said in a statement.

“The company has been developing a management succession plan and has taken corrective action to improve operations … In the best interest of all its shareholders, management believes the company should continue with this strategy.”