A shakeup at the junior partner of the proposed Ajax copper and gold mine south of Aberdeen in Kamloops reflects the fact the company is no longer in the driver’s seat, Abacus’s new chairman and CEO told KTW.
Abacus Mining & Exploration Corp. announced James Excell — the mining executive and metallurgical engineer who headed the company when it made its plans public to open a mine here —has left the operation.
Chairman Thomas McKeever will also step down, but remain as a director.
In their place, current director and Vancouver mining industry veteran Michael McInnis will act both as chairman and CEO of Abacus. He was most recently president and CEO of True Gold Mining, where he will now act as vice-chairman.
McInnis said Excell and McKeever were coaxed out of semi-retirement to develop the project. But, after a deal with KGHM left Abacus with only 20 per cent control, their expertise was no longer needed.
Abacus retains a 20 per cent interest in the proposed Ajax mine.
It sold majority control of the deposit to Poland’s KGHM in 2010 for $37 million. KGHM later exercised its rights to take an 80 per cent interest. The Polish company is also a minority shareholder in Abacus itself, holding about seven per cent of the shares in mid-2013.
“Through a series of events, KGHM took over and they had the right to do that,” McInnis said.
The company underwent a strategic review to determine if it could strike a deal with offshore smelters to sell its share of concentrate directly if the mine were approved through the harmonized federal-provincial comprehensive environmental assessment.
“We wanted to see if there might be an arrangement to monetize our interest… . The basic message [from smelting companies] was, ‘You’re not far enough along that we need to move today.’”
Abacus has $50 million held in trust from the deal it made with KGHM to begin financing its share of the $800-million project. Under terms of the deal, KGHM must advance remainder of the funds from future mine revenues.
KGHM Ajax announced in August 2013 it is revising its mine plan to look at a larger pit and moving its infrastructure south. It has said it expects to file its application with the federal and provincial governments this year.
Since the deal with KGHM, shares for Abacus have languished to about one-quarter the value. On Monday, Feb. 3, they were trading at about eight cents per share.
McInnis said part of his responsibility is to monitor progress of the project and report to Abacus shareholders.
“KGHM is doing a good job. There’s always people with different opinions and points of view,” he said of local opposition to the project.
“When they [KGHM] took it over, they listened to concerns and looked at the infrastructure, primarily the location, and thought maybe there’s a better way.”
That led to the potential of a larger pit and moving infrastructure south of the pit.
McInnis is listed as a company insider with about $30,000 worth of shares and options to purchase another 1.4-million shares.
