TORONTO – The largest shareholder of Wesdome Gold Mines (TSX:WDO) says it has lost confidence in the board and management and wants the company to postpone its annual meeting, which is scheduled for Tuesday.
Resolute Funds doesn’t think Wesdome’s leadership is capable of addressing issues at the Eagle River mining complex in northwestern Ontario near Wawa and will withhold support for most of the directors up for election.
The investment manager, which holds a 25.8 per cent stake in the miner, says it wants to engage in “constructive discussions” aimed at changing the board and will support only two of the current eight nominees.
Resolute is concerned 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.
Its financial report last week showed 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 estimate of between 54,000 and 60,000 ounces.
Wesdome’s management has outlined a plan to increase annual production over the next four years to 80,000 ounces but Resolute has not been satisfied.