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Ecuador-focused miner SolGold has begun process to replace CEO -source

01/15/2021 | 02:47pm

LONDON/TORONTO, Jan 15 (Reuters) - Copper and gold miner SolGold Plc has launched a process to replace Chief Executive Nick Mather after nearly half of shareholders, including BHP and Newcrest, opposed his reappointment to the board, said an industry source familiar with the matter.

London-listed SolGold is seeking to mend fences with BHP and Newcrest following a dispute over funding for the miner's mammoth Ecuador copper-gold project.

Nearly half, or 44.7%, of shares eligible to be cast at last month's annual meeting were voted against reappointing Mather to the board.

The source said the company has started working on a succession plan to repair relations with shareholders. One SolGold shareholder said it was expected the company would announce a succession plan before summer.

SolGold declined to comment on succession planning in a statement to Reuters.

The miner last year hired investment bank Citi as a defence adviser, and the potential of its undeveloped Alpala project raised speculation the company could become a takeover target.

Copper is in high demand for use in renewable energy and electric vehicles and new deposits are rare and increasingly difficult to recover, while gold prices are hovering around record highs.

In the same statement to Reuters, SolGold said it is focused on building value in the stock via exploration and leverage to rising commodity prices while continuing to de-risk the Alpala project.

The miner has appointed four new non-executive directors in recent months, part of efforts to improve governance.

No. 2 investor Newcrest opposed a $100 million financing package SolGold agreed last May with Franco-Nevada. An option to upsize the financing by $50 million lapsed on Jan. 11.

SolGold needs to secure more than $2.5 billion to complete Alpala, expected to start production in 2025. (Reporting by Jeff Lewis in Toronto and Clara Denina in London Editing by Amran Abocar and Matthew Lewis)

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