Global Lithium Resources is tightening its belt amid the lithium price downturn, as one of its shareholders continues his attempt to oust two directors and join the board.
Global Lithium Resources is tightening its belt amid the lithium price downturn, as one of its shareholders continues his attempt to oust two directors and join the board.
The lithium aspirant told the market it was planning to reduce the size of its board from four to three and scale back progress on a definitive feasibility study for its early-stage Manna lithium project near Kalgoorlie amid the current lithium market environment.
It comes after shareholder Leon Zhu- who holds a 6.9 per cent stake through his property development company Sincerity Development – last month lobbed a 249D notice in a bid to oust two board members, cap the board at three and add himself into the mix.
Today, GL1 announced its own plans to reduce the size of its board, which it claimed were in the works months prior to Mr Zhu’s approach- described last month as "opportunistic".
Non-executive directors Greg Lilleyman and Hayley Lawrance are expected to resign at the annual general meeting in November, while executive director Dianmin Chen would return to a non-executive director role.
GL1 plans to appoint chief financial officer Matthew Allen to executive director finance to fill the board vacancy at the upcoming AGM.
Executive chair Mr Mitchell will also scale back his hours, all in a move to reduce corporate costs.
The company is seeking to defer the consideration of Mr Zhu’s proposal until the AGM, which it claimed would further cut costs and ensure all corporate governance issues had been resolved.
Further, GL1 said deferring the consideration allowed the board to “understand any remaining issues which Sincerity has (if any), given this announcement and the corporate and operational changes”.
GL1 said it intended to apply to the Supreme Court of WA for orders tomorrow for the 249D proposals to be considered at the AGM.
In the statement to the ASX, Mr Mitchell said implementing the changes were appropriate given the macro circumstances facing the company the lithium industry.
“Our focus must remain on protecting and enhancing value for our shareholders, which is why these tough decisions are now unavoidable,” he said.
“Nevertheless, the company is in a robust financial position and is well placed to weather the current market conditions.”
GL1 has about $25 million in the bank.
The company will wrap up current work activities on the Manna project, ahead of suspending further work until it sees improvements in the lithium market.
It said it would return to finalise the DFS when markets support the funding required to commence construction of the Manna project.
Mr Zhu's revised notice put forward last month- which followed an invalid notice lobbed days prior- requested shareholders meet to consider removing non-executive directors Greg Lilleyman and Hayley Lawrance among the other changes.
Should Mr Zhu’s proposal come to fruition, it would result in executive director Dianmin Chen, executive chair Ron Mitchell and Mr Zhu being the three board members.
But Mr Zhu’s notice was described as “opportunistic and not in the best interest of all shareholders” by Mr Mitchell at the time.
Further, Mr Mithcell said he "couldn't understand how Mr Zhu's experience in property will enhance the key skills of the GL1 board", skills its understood the shareholder sees as an asset to the project's development.
