Noront axes CEO to please fund manager

Noront Resources Ltd. said yesterday it has resolved a proxy battle with a dissident shareholder by removing its chief executive, Richard Nemis, and agreeing to replace the company's board.

Since the beginning of the month, the junior miner had been embroiled in public row with hedge-fund manager Warren Irwin of Rosseau Asset Management Ltd., which has about a 10-per-cent stake in Toronto-based Noront.

Irwin has complained that Noront is "squandering" its vast and rich copper-nickel deposit in the James Bay Lowlands in northern Ontario in what's become known as the "Ring of Fire."

Drilling costs and cash burn are primary among Irwin's concerns, leading Rosseau to propose to shareholders that the company replace its board and chief executive.

"They have a hell of a good property and it's being squandered," Irwin told the Financial Post this week. "And if we don't get a good board and good management in here, it will be a lot harder to raise money in this difficult environment.

"At the current burn rate, they're going to run out of cash in about seven months."

Noront's discovery at McFaulds Lake, Ont., has been estimated to contain more than three million tonnes of ore. As part of the agreement announced Monday, the company's 70-year-old chief executive Richard Nemis will step down as CEO but remain an adviser to the new board of directors.

Joseph Hamilton and Paul Parisotto, who chaired the company's committee to resolve the row, will be appointed interim joint chief executives. The company said it has proposed a slate of six new directors that will be voted on at its annual shareholder meeting today.

"We are confident that the board proposed for election will bring together the expertise Noront requires for the next stage of its development," Irwin said in a statement.

Financial Post