Investor calls for change at gold explorer Koonenberry
Australian explorer Koonenberry Gold (ASX: KNB) is facing a potential shareholder revolt amid concerns over its governance and remuneration.On Monday, Melbourne-based boutique fund Datt Capital, which holds a major stake in Koonenberry, went public with its concerns over the composition of Koonenberry’s board and proposed incentives to be issued to directors.Datt chief investment officer Emanuel Datt told MINING.com it had first engaged with Koonenberry about six weeks ago over the nomination of a Datt representative to the Koonenberry board.“They were very much opposed to any sort of board change,” he said.“It made us think, well, we own over 10% of the company, we’re in a fairly strong position. We’d like a nominee on the board, but if we need to go through a formal shareholder, process, we’ll be going for two seats rather than just one.”Datt then formally moved resolutions under section 203D of the Australian Corporations Act, calling for the removal of non-executive directors Darren Glover and George Rogers.Rogers was a co-founder of Koonenberry, while Glover joined the board last year after selling the company its Lachlan project.Emanuel Datt, the founder of Datt Capital. (Image courtesy of Datt Capital.)Datt said neither had public company experience or a track record of value creation.“Ultimately, the board in its present incarnation, it’s fine if it’s a micro-cap company, and when the operations are still fairly speculative,” he said. However, shares in Koonenberry are up by around 200% year-to-date, including almost 70% in April, following exploration success at its Enmore project in New South Wales.It started the week with a market capitalization of around A$70 million (US$45 million).“This looks like it could be a very real major gold discovery, and effectively, that’s when you’ve got to start preparing for the company’s evolution,” Datt said. “We’re really of the belief that you’ve got to have the right sort of experience and expertise around the board table to guide the company towards that outcome of maximising shareholder value in the medium term.”Datt is proposing the appointment of Datt partner Tony Gu as its board representative and geologist and former IGO (ASX: IGO) exploration manager Tim Kennedy as an independent non-executive director.Remuneration objectionsKoonenberry was criticized for not disclosing Datt’s proposed board changes to the ASX and instead, announcing a new incentive package for directors on April 10.The incentives included the issue of performance rights to employees if the company reported single drill intercepts of at least 20 gram metres and 50 gram metres of gold and the company achieving a volume-weighted average share price (VWAP) of at least A3.75c for 10 consecutive days.Managing director Dan Power is set to receive roughly 2 million performance rights for achieving at least one 20 gram metre gold hit and at least one 50 gram metre gold hit.Datt estimates the package could result in a potential A$5.4 million dilution to shareholder value, assuming a A20c share price, and could dilute existing shareholders by almost 6%.Datt would prefer to see vesting conditions based on tangible metrics, such as JORC gold resource quantities, combined with a 30-day VWAP metric.“I don’t think what we’re proposing is controversial in any way, shape or form,” he said. “I really think it’s just a situation where the incumbent board are very tight and cosy and are obviously granting themselves pretty rich performance right schemes with very low vesting conditions.”Datt said the company’s move had received support from other Koonenberry shareholders.“That has been from smaller investors, or even medium-sized investors, that are just tired of companies taking too many liberties. It’s like correcting your own homework, right?”Emerging discoveryKoonenberry listed on the ASX in late 2021 with a focus on its namesake project in New South Wales.Shares drifted lower in the years after listing due to limited exploration success and in October 2024, Koonenberry acquired a package of new projects in NSW, which included two joint ventures with Newmont Corporation (NYSE: NEM).Newmont has acquired 80% of the Junee project, with Koonenberry free carried to commercial production, while Newmont can earn up to 80% of the Fairholme project by spending A$5 million on exploration.While Newmont has been drilling both projects this year, Koonenberry has had the most success at its 100%-owned Enmore project.Enmore is just 20km south of the Hillgrove gold-antimony project, a historical mine which is currently being redeveloped by Larvotto Resources (ASX: LRV).Earlier this month, shares in Koonenberry surged by as much as 40% after it reported a hit of 170m at 1.75 grams per tonne gold (g/t) from 77m, including 18m at 9.95g/t gold from the first hole at the Sunnyside prospect.It followed that up with 172.9m at 2.07g/t gold in the second hole, and today, reported 102m at 1.10g/t gold in the third hole.The company’s other major shareholders are fellow Melbourne-based funds Lion Selection Group (ASX: LSX) and Lowell Resources Fund (ASX: LRT).Koonenberry did not respond to a request for comment, but in the statement released yesterday, it said it was considering the validity of Datt’s notices.Meanwhile, Datt spent A$831,609 purchasing Koonenberry shares on market yesterday to take its stake in the company from 11.3% to 12.8%.“We intend on continuing to build our holding and keeping these bastards honest,” he laughed. “You can quote me on that.”Weiter zum vollständigen Artikel bei Mining.com
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