Gold exploration and development firm Stratex has refuted a new business strategy brought forth by a shareholder action group ahead of a general meeting vote.
The group of disgruntled sharehoulders, which is led by Stratex founders David Hall and Paul Foord, includes AngloGold Ashanti, Canada's Teck and Antofagastsa.
The requisition involves scrapping a deal to merge with Australia's Crusader Resources, installing Hall and Foord as chief executive and chairman and adding base metals like copper and zinc to the company's portfolio.
It also calls for Stratex to combine assets with Thani Stratex Resources, of which Hall is the chief executive. Stratex owns about 30 per cent of Thani Stratex.
Hall, who owns a 2.2 per cent stake in the company, said the new strategy was driven by the support of big name shareholders.
"They approached us to say we don't like the deal, we want to see a different strategy. We proposed that strategy in the business plan," Hall told City A.M.
In its statement today, Stratex said it found "fundamental flaws" in the group's plans and it called the group's promises about Thani Stratex's potential "unsubstantial".
Chief executive Marcus Engelbrecht defended the Crusader acquisition, which he argued was "highly value accretive" for shareholders.
The board of Stratex is in the process of executing the highly value accretive and transformational acquisition of Crusader Resources. Capital investment today is focussed on assets that provide growth and cash flow and Crusader is an unrivalled proposition for Stratex shareholders in this respect, whilst also providing exciting exploration upside.
The Aim-listed company, which has a market capitalisation of around £5.3m, will hold a vote at a general meeting on 1 November. Stratex recommended shareholders vote against all resolutions, and it was backed by the Institutional Shareholder Services (ISS), which Engelbrecht said was a "clear demonstration of the lack of foundation behind the requisitioning shareholders resolutions".
Stratex said it had received irrevocable commitments to vote against the resolutions from about 12.12 per cent of shareholders.
Hall said about 38 per cent of shareholders were on the side of the requisition, which must receive at least 51 per cent of votes on the day to pass.
John Meyer, mining analyst and partner at SP Angel, said: "The proposal by the rebels has been put together at the request of some significant shareholders and appears to offer a better value proposition to the Crusader deal in our view.
"We view a new merger proposal with Thani Stratex which is said to have been previously put to the Stratex board as potentially offering significantly more appropriate upside and value potential."