Columbus Gold launches proxy fight against Eastmain Resources

As Robert Giustra sees it, the management team at Eastmain Resources Inc. is so entrenched there wasn’t any reason to even attempt a friendly method of the organization.

“The overwhelming consensus was that many others have tried and been averted, there was no point,” the chairman and leader of Columbus Gold Corp. said in an interview.

Columbus launched a proxy combat Eastmain, a fellow junior miner, on Monday. It’s an unusual example in Canada of 1 public company trying to unseat the board of another. Generally, activists or frustrated long-term shareholders launch these battles.

But Giustra, who’s a cousin of mining finance guru Frank Giustra, argued that this was the best choice. He isn’t thinking about a formal takeover bid, partly while he said that not enough data is available on Eastmain’s Clearwater gold project. While Giustra thinks the Quebec project has a lot of promise, he assumed Eastmain would block any request to see the private data.

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Instead, he hatched a bold intend to replace Eastmain’s directors at next month’s annual meeting, after which quickly open up the organization for any potential takeover or any other transaction. Columbus could get involved in this method, but Giustra said there isn’t any guarantee.



Eastmain CEO Don Robinson dismissed Giustra’s claims as utter nonsense. He said that Toronto-based Eastmain provides data to other interested parties, and the man would be happy to discuss opportunities with Columbus.

“I would say that it’s our fiduciary duty to ensure we look whatsoever opportunities which come our way. Where (Giustra’s allegation) originates from, I am unable to let you know,” he said.

The war of words paves the way for what could be an ugly fight. And there may be more of these in the future within the junior mining space in the near future. With gold prices improving this season, juniors are emerging from the long period of hibernation and searching for new opportunities.

Robinson and his wife, Catherine Butella, have run Eastmain for roughly two decades. Giustra claims they’ve collected hefty salaries while neglecting to advance the Clearwater project in a reasonable pace. He noted that Eastmain has been talking about the work since a minimum of 2002, but hasn’t even completed a feasibility study on it up to now.

Robinson noted that while Eastmain has owned the Clearwater task for a long time, it only was a focus for the company this year, when it made a key discovery on the site. He added that it’s a highly complex project and requires a lot of drilling.

Assuming no settlement is reached, Giustra said he is confident Columbus will win this proxy fight. He claimed that Eastmain’s institutional investors support his plan.

“I don’t believe it will likely be a fight, to be completely candid,” he explained. “The disenchantment (from shareholders) runs deep.”

pkoven@nationalpost.com

Twitter.com/peterkoven