A special meeting of shareholders of Kimber Resources Inc. (AMEX:KBX)(TSX:KBR) has been requisitioned by James J. Puplava, President of Puplava Financial Services Inc., a significant shareholder and a director of the company since 2004. A response from Kimber's Management is awaited.
The purpose of the requisitioned special meeting will be to remove provisions for three-year, staggered terms of office for the board of directors, to replace the board of directors with Mr. Puplava's nominees, and to install a new management team dedicated to achieving Kimber Resource's full potential and value.
Mr. Puplava has asked Kimber's Management to include the items in his requisition on the agenda for the company's upcoming 2006 annual general meeting of shareholders in order to avoid unnecessary duplication of costs.
"I am a strong believer in this gold bull market. As a precious metals investor, I believe the best way to profit is through the ownership of shares in developing resource companies," Puplava said. "Kimber Resources has the potential to develop its Monterde project into a world-class, gold and silver operation in Mexico's Sierra Madre."
"While Kimber has achieved some important milestones in the past two years "" including its successful listing on the American Stock Exchange in December 2005, growing gold and silver resources, and the decision to expand its exploration efforts beyond the well-drilled Carmen deposit "" I have become increasingly disappointed in the management of the company both as an investor and as a director," Puplava stated.
"Kimber Resources has consistently underperformed its peers in terms of share performance, resource growth, and development strategies," Puplava noted. "As a result, Kimber Resource's shares remain significantly undervalued. In my opinion, the reason for that undervaluation and the stock's poor performance is ineffective management."
"My family and I are substantial, long-term investors in Kimber Resources. We have several issues of concern which, we understand, many investors share," Puplava said.
Our concerns include the following:
- Kimber's staggered board of directors. Staggered boards are contrary to shareholder democracy and serve no purpose other than to entrench the board of directors and management to the detriment of shareholders.
- Kimber management has consistently failed to achieve its publicly-stated goals and objectives, including the timing and execution of resource estimates, plans to accelerate drilling on the Cartare and El Orito Norte discoveries, and the completion of a pre-feasibility study on the Carmen deposit.
- Management announced a further delay of the pre-feasibility study on October 1, 2006.
- Management's continuing failure to meet its goals and objectives not only has resulted in Kimber's stock underperforming its peers, but more recently in a steep decline in the value of our shares.
- Alan Hitchborn, Kimber's former vice president of development and the geologist responsible for the discovery and advancement of the Monterde project, resigned effective July 7, 2006. Mr. Hitchborn's departure has left Kimber bereft of the strong technical expertise, knowledge of the Monterde property and the leadership needed to advance the Monterde project in the manner which the shareholders deserve.
- The company's recent newsletters and press releases indicate that since Mr. Hitchborn's departure, the progress and momentum at Monterde has stalled. For example, the company's August newsletter (dated September 6, 2006) blames normal summer rain for recent drilling delays.
- Kimber's September 14, 2006, news release about a driving fatality suggests that proper management oversight and controls are slipping.
- The resignations in 2006 of Kimber's financial executives and independent accountants raise additional serious questions.
"I have been frustrated in my efforts to focus Kimber's management and the board of directors on addressing these concerns," Puplava stated.
"Therefore, with reluctance, I have resolved to initiate a proxy campaign to ask shareholders to amend Kimber's articles to remove the provisions for a staggered Board of Directors and to elect a new board of directors who will appoint new management dedicated to representing the interests of all the shareholders of Kimber Resources," Puplava said.
"I believe that with a committed Board of Directors and a stronger management team, Kimber Resources can position itself to become a profitable, growing gold and silver producer," Puplava added. "Under new leadership, I believe Kimber's full potential can be achieved."
"As a first step to ensure that Kimber moves forward aggressively and effectively, I am pleased to announce that Alan Hitchborn, who achieved a 96% success rate with drilling on the Carmen deposit, has agreed to be a nominee for election to the new Kimber board of directors, and when elected, will return to the company as acting CEO," Puplava announced.
"Mr. Hitchborn spent eleven years with Placer Dome as senior geologist and chief geologist at the Bald Mountain mine, followed by several more years in Vancouver as part of Placer's reserve estimation group. His team at Bald Mountain developed two million ounces of gold reserves at a cash cost of less than $5 per ounce," Puplava noted.
"Alan Hitchborn's headquarters experience included resource estimates for pre-feasibility and feasibility studies, three-dimensional modeling, mine auditing, and reviews of acquisition opportunities," Puplava added. "Before bringing the Monterde project to Kimber in 1999, Mr. Hitchborn was president and chief geologist for Golden Treasure Explorations."
"I am also pleased to announce that I have assembled a slate of director nominees who will assist Mr. Hitchborn and myself in developing an aggressive exploration and development program to unlock shareholder value," Puplava continued.
Puplava's other director nominees are:
Dr. Keith Barron, a noted geologist who has consulted for more than 20 companies on six continents. Dr. Barron is a founder and director of Aurelian Resources in Toronto where he served as vice-president of exploration from 2002 to 2005. For the past year he has been active in the founding and start-up of U308 Limited in Toronto where he serves as a director and vice-president of exploration.
Mr. Stephen Quin, president and CEO of Sherwood Copper Corporation headquartered in Vancouver, British Columbia. Sherwood is currently bringing a new copper mine into production. Mr. Quin is a professional geologist with 25 years of international experience in exploration and corporate development. He is a graduate of the Royal School of Mines at Imperial College London. Mr. Quin is also a director of Mercator Minerals, American Gold Capital, Maximus Ventures, and Rare Element Resources.
Dr. Leanne Baker, a former metals and mining equity analyst and managing director of Salomon Smith Barney, who is managing director of Investor Resources LLC. She is also a director of Agnico-Eagle Mines, Reunion Gold Corporation, U.S. Gold Corporation, and ETFS Commodity Securities.
Mr. Larry Bell of Vancouver who is the non-executive Chair of the Board of Directors of BC Hydro, one of the largest electric utilities in Canada. He is also a fellow of the Institute of Corporate Directors, a director of Goldcorp, Silver Wheaton, International Forest Products, Miramar Mining, and Harwood Specialty Products. In the public sector, Mr. Bell has served as British Columbia Deputy Minister of Finance and Secretary to the Treasury Board.
Mr. Peter Nixon was a founding partner of Goepel Shields, an independent investment firm in Toronto specializing in providing investment advice to institutional investors. He has over 30 years' experience in the securities industry and is a member of the Institute of Corporate Directors. Mr. Nixon serves on the boards of Dundee Precious Metals, Miramar Mining, Reunion Gold Corporation, and Stornoway Diamond Corporation
"I am gratified that these outstanding mining and financial executives will be lending their expertise to our efforts to bring new leadership to Kimber Resources," Puplava said.
Mr. Pulava stated that he intends to stay on the board of directors of Kimber Resources.
DISCLAIMER: While Mr. Puplava does intend to commence a proxy solicitation, Mr. Puplava has not filed an Information Circular. Accordingly, Mr. Puplava is not currently conducting, nor does this press release constitute, a solicitation of proxies in respect of Kimber Resources.
