[miningmx.com] — MINING entrepreneur Peter Skeat has fallen out with the board of his latest venture – Galaxy Gold (Galaxy) – repeating a pattern seen in previous ventures at Mintails/Ergo and Afrikander Lease.
Galaxy announced on February 28 that Skeat, the founder and CEO of the company, would stand down with immediate effect, becoming a non-executive director.
The company is now being run by Ian Watson – former CEO of Platmin and former MD of Northam Platinum – as executive chairperson for an interim period while a new CEO is found.
Galaxy is developing the Agnes gold mine near Barberton in Mpumalanga, which Skeat bought at an auction for just R18m in December 2008.
Watson told Miningmx: “I know Peter is not happy with this, but his strengths lie in innovation and spotting the next growth opportunity.
“When it comes to the day-to-day grind of project management, the board felt someone with my experience was better suited to dealing with the nitty-gritty details.’
Skeat’s departure follows gold mining industry rumours that senior staff were unhappy with his management style and a number had left in recent months.
Skeat replied, “I don’t think there’s any unhappiness with me other than that I failed to put the JSE listing in place last year.’
Watson said: “We’ve lost one or two people, but I’ve brought in some good executives.’
Skeat will remain the largest shareholder in the company, holding around 30% even after the dilution which will take place through the black economic empowerment deals announced on March 15.
Galaxy was supposed to list last year, but this was delayed by the JSE authorities because of the uncertainties over tenure of prospecting and mining rights title in the wake of the ICT/Kumba development.
One obvious concern is that Skeat may sell out and go looking for his next venture. That means potential selling pressure overhanging the Galaxy share when the company lists.
Skeat told Miningmx he’s not sure what he’s going to do regarding his future. Watson commented the board will ensure that “the other shareholders are protected.’
Skeat maintained his departure resulted mainly because of Galaxy’s plans to list on an overseas bourse.
Watson replied Galaxy’s intention was to list on the JSE and there were no concrete plans to list elsewhere, although “we are obviously looking at all the options’.
Skeat said: “What happens when you approach foreign investors about Galaxy is that they google me and immediately up comes the Brett Kebble saga.
“You then have this problem of perception versus reality because, while most South African investors know the full story of what happened between myself and Kebble, overseas investors don’t.
“Their reaction is that they don’t want to get involved with someone like me because of the Kebble mess. Do I like this situation? No, I don’t – but I cannot fight Google.’
For the record, Skeat is the man who played the key role in the downfall of Brett Kebble.
He pursued Kebble doggedly through the courts between 2003 and 2005 over a R50m debt relating to Kebble’s purchase of shares in Afrikander Lease from Skeat.
Skeat did so despite rising personal risk as he pushed for the liquidation of Kebble’s flagship company, JCI.
Skeat received frequent death threats and narrowly avoided an attempt by Kebble to have him arrested on trumped-up charges.
Kebble could not repay the debt because his mining “house of cards” was collapsing around him. Skeat finally got his money when Kebble was forced into the deal with Investec, which took over JCI.
The problem for future Galaxy minority shareholders is they could end up suffering “collateral damage’ – to use that lovely military euphemism for civilian casualties in war situations.
ASX-listed Mintails is a case in point. The company ran out of money – despite claims by then-chairperson Bryan Frost that it was adequately funded – and was forced to sell its controlling stake in the Ergo dump retreatment project near Springs to partner DRDGOLD in order to survive.
Mintails shares lost more than 95% of their value and currently trade around just 8 Australian cents, and that’s after a recent 10 for 1 consolidation.
Skeat was criticised by some Mintails investors for looking after his own interests by selling out and not doing enough to fight the poor management by Frost.
Asked about this, Skeat told Miningmx in December 2008: “Regarding Bryan Frost, I had a choice – once I realised things were not going well – which was to fight him or to step aside.
“I stepped aside because I have had enough conflict in my life recently through the confrontations with Brett Kebble and Neal Froneman .’
The vastly experienced and highly-regarded Ian Watson cannot in any way be compared with the likes of Bryan Frost, but clearly the situation at Galaxy is not a comfortable one at present.
