Selwyn Resources (CVE:SWN) saw its shares move up Monday after it announced that its annual and special meeting will now be held on June 17 and will address the resolution to liquidate the company, following the adjourned annual meeting that was scheduled for April 22.
Shares of the junior exploration company, which said it will be proceeding with an "orderly liquidation" process, were up by one penny at 9 cents late Monday morning on the TSX Venture Exchange.
Selwyn said in a statement Monday that Samara Capital, with support of certain shareholders of the company, has presented a proposal for the future direction of Selwyn that differs from the current board's strategic plan.
Last week, the company's shareholders approved the sale of its remaining 50 per cent interest in the Selywn project in the Yukon to joint venture partner Chihong Canada Mining, for a total price of $50 million.
According to Selwyn, Samara has stated that if it gained control of the Selwyn board, it would implement a special dividend of the net sale proceeds from the sale of the project, and would conduct a strategic review of the ScoZinc mine in Nova Scotia. The review would target either the liquidation of all of Selwyn's assets, or the sale of Selwyn as a whole, it said Monday.
Selwyn had planned to use the proceeds from the sale to repay outstanding debt, as well as for the restart of production at its ScoZinc mine.
In response to the demand from its shareholders for distribution of the Selwyn project proceeds, the company said it has decided that the "most equitable option" would be to proceed with an orderly liquidation as opposed to immediate payment of a dividend.
"Given the demands from such shareholders, Selwyn believes that a liquidation will ensure that all shareholders and stakeholders are treated equally and rateably.
"At the Meeting, shareholders will be asked to consider a special resolution under the Business Corporations Act (British Columbia) to authorize a liquidation of the company."
If Selwyn's current directors are re-elected at the annual meeting, the board will pursue the strategy chosen by shareholders through the liquidation resolution.
If the liquidation is not approved, the board plans to carry on the company's business, it said, and develop the strategy that allows shareholders to individually choose whether to participate in the company going forward, or to authorize it to take steps to return cash to shareholders.
Selwyn said Monday that shareholders should get comprehensive information on the competing alternatives being proposed, both by itself and by Samara.
"The company remains open to options that upon proper and full review will result in the greatest return to and be in the best interests of all Selwyn shareholders and stakeholders. As such, the company invites a representative from one of Resource Capital Fund IV LP, Pan-Pacific Metal Mining Corporation, China Mining Resources Group Limited or Transaminvest S.A. to fill the vacant position on the Selwyn board," the company concluded.
It promised that until shareholders have voted at the meeting, it will not use any proceeds from the sale to fund any capital expenses at ScoZinc or make any acquisitions or investments.
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