April 23 (Bloomberg) -- Quantum Pacific Investment Ltd., which represents a group that owns 5 percent of Australia’s Intrepid Mines Ltd., wants to remove some directors at the gold explorer after it lost control of a key asset in Indonesia.
“We have lost confidence in the board and are leading in requisitioning a general meeting” to remove five of seven board members and appoint four new directors, Greg Mazur, a founding partner at Hong Kong-based Quantum Pacific, said today in a phone interview. The group the private equity investor represents is Intrepid’s third-largest shareholder, he said.
Intrepid entered into an agreement with Indonesia’s PT Indo Multi Niaga in 2008 for an 80 percent stake in the Tujuh Bukit deposit in East Java, which may contain 25 million ounces of gold and 15 billion pounds of copper, according to an initial assessment. Last year, the owners of Indo Multi, Andreas Reza Nazaruddin and Maya Miranda Ambarsari, sold the company to a new owner, who transfered the mining license to a separate entity, dishonoring the agreement with Intrepid, which has spent $100 million to develop the project.
Intrepid, with a market value of A$125 million today, or about 10 percent of its worth two years ago, shouldn’t have spent that much without having “adequate legal protection,” said Mazur. Work on the project has been suspended since July.
Intrepid’s Chief Executive Officer Brad Gordon didn’t return calls seeking comment or respond to voice messages left on his mobile phone today.
In a bid to recover the asset, Intrepid gave Surya Paloh, an Indonesian media magnate and politician, a 5 percent stake. Paloh will help the company recover the asset, the Australian company said in a statement in August. Intrepid has also filed complaints with the Indonesian police alleging fraud and embezzlement by the original shareholders of Indo Multi and associated parties, it said in a stock exchange filing Feb. 26.
PT Bumi Sukses Indo, the new holder of the project license, is controlled by businessman Edwin Soeryadjaya. Mazur said today he has contacted Soeryadjaya, “who has given us comfort that a negotiated solution is possible.”
Taurus Funds Management is Intrepid’s biggest shareholder with 8.7 percent stake, according to data compiled by Bloomberg, followed by Van Eck Associates with 7.5 percent.
“The significant decline in our company’s share price and continued negative news surrounding the project have made it self-evident that a change in board and new corporate path is required to steer our company out of this crisis and reposition it for future success,” Quantum Pacific said in a statement.
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