Ron Thiessen: Taseko Chairman on Fending Off A Self-Dealing New York Activist Hedge Fund
An activist group recently bought 5% of Taseko Mines to force an extraordinary meeting of the board with a goal of replacing board members and reshaping the direction of the company. According to Chairman Ron Thiessen, this comes despite the activist group having limited knowledge of how to run a mining company. Gibraltar, Taseko’s flagship mine, is one of the lowest grade copper mines in the world and requires a very competent management to turn a profit.
Feelings are running high and the activist group is seen as antagonistic, a corporate raid attempting to asset strip the company. The group has labelled certain assets valueless that are actually valuable and want to defer stripping which would sterilize the ore body and dramatically reduce the life of the mine.
The activist group have not stated why they have chosen Taseko but divestiture could result in bonds being paid at face value rather than the current 50% discount. This group has twice as much invested in bonds as they do in the stock. How these groups normally operate is by gaining an interest in the company’s debt then taking over the board. They then elevate the debt to a secured position and consequently strip the assets.
The Taseko take over has become a major deal in Canada and Ron Thiessen provides us with an exclusive interview to go over his side of the conflict
Talking points from this week’s interview:
• How do activist groups operate to strip companies?
• What makes a company vulnerable to corporate raiders?
• Negative activism vs positive activism
• Most attempts at corporate raiding actually fail
• The Do’s and Don’ts of Fund Activism in the Resource Sector
Mr. Ronald W. Thiessen, CPA, is President, Chief Executive Officer & Director at Quartz Mountain Resources Ltd., President, Chief Executive Officer & Director at Northern Dynasty Minerals Ltd., Chief Executive Officer & Director at Hunter Dickinson, Inc., Chairman at Taseko Mines Ltd., and Chief Executive Officer & Director at Hunter Dickinson Services, Inc. He is on the Board of Directors at Quartz Mountain Resources Ltd., Northern Dynasty Minerals Ltd., Amarc Resources Ltd., Hunter Dickinson, Inc., Pebble Partnership, and Hunter Dickinson Services, Inc.
Mr. Thiessen was previously employed as Independent Director by Detour Gold Corp., Chairman by Rockwell Diamonds, Inc., Executive Director by Anooraq Resources Corp., Co-Chairman by Continental Minerals Corp., Chairman by Farallon Mining Ltd., Chairman by Great Basin Gold Ltd., and President by Casamiro Resource Corp. He also served on the board at Tri-Gold Resources Corp.