Civil war at Rockwell Diamonds

Brendan Ryan | Wed, 20 May 2009 18:21
[miningmx.com] -- THE fight for Rockwell Diamonds is getting bitter with some of the present directors apparently supporting Pala Investments which is bidding to overhaul the current board.

They include Sandile Zungu, chairman of African Vanguard Resources which is the BEE partner holding 26% of Rockwell’s various mines and three of the non-executive directors.

Also joining Pala is Hennie Van Wyk who is still listed on Rockwell’s website as the group’s operations director although, according to Pala, Van Wyk has “left Rockwell due to his frustrations over the way senior management were operating the company.”

Rockwell acquired a number of its mines through buying Van Wyk’s privately owned diamond mining company and kept him on to run them.

Van Wyk’s shift to the Pala camp is a blow because he is highly regarded in the alluvial diamond mining industry as an efficient and innovative builder and operator of recovery plants. He is also, according to Pala, “a sizeable shareholder of Rockwell.”

Both Van Wyk and Zungu are listed on a slate of new directors that Pala intends putting forward which also includes three existing Rockwell non-executive directors – William Fisher, Terence Janes and Gregory Radke.

The move has caused a split in the present Rockwell board. Chairman David Copeland along with CEO John Bristow and his brother and fellow director Mark Bristow have banded together as “the executive directors”.

Mark Bristow is the CEO of Randgold Resources. John Bristow declined to comment on the apparent split.

The three issued a statement today “in their own names and not on behalf of any other Rockwell director” slamming Pala’s action in calling a meeting scheduled for June 17 at which it will attempt to remove the existing board.

According to Copeland, “we see Pala’s proposal to remove the executive directors and to terminate Rockwell’s shareholder rights plan as yet another attempt to control the company - this time as a kind of cashless takeover.”

Copeland added, “it seems clear to us that Pala intends to terminate our existing shareholder rights plan so they can cement their control over Rockwell through a rights offering or other financing that they will dominate.

“This is clearly a continuation of the failed takeover attempt they launched last year only this time they are trying to control the company without offering to pay shareholders any control premium at all.

“Shareholders will see in our circular that we have a competing plan that will not just hand over control to anybody. “

Pala’s proposed chairman is someone who should be familiar to many in the South African mining sector because he’s Matie Von Wielligh.

He ran the iron ore operations of the former Iscor which became Kumba Resources. When Kumba was split into Exxaro Resources and Kumba Iron Ore many believed Von Wielligh would get the CEO position at Kumba Iron Ore but that went instead to Ras Myburgh.

According to the Pala circular Von Wielligh is currently chairman of Afrimat and a director of several private South African mining companies.