The Karl Simich-chaired investment company GoldLink IncomePlus has proposed to buy 10 per cent of shares in Subiaco-based Indago Resources as part of a bid to replace the board with its own nominees.
The offer comprises 50 GoldLink shares for every one Indago share to which the offer relates, valuing Indago shares at $1 each - a 49 per cent premium to Indago's last sale price today and almost double Indago's price of just a week ago.
Indago has recommended shareholders take no action on the proposal.
GoldLink director Timothy Kestell said the investment group aimed to improve the poor returns being endured by all Indago shareholders.
Mr Kestell said GoldLink, which has a 9.94 per cent stake in Indago (formerly Western Metals), had today requested Indago requisition a general meeting of shareholders to vote on resolutions to replace its directors with three highly experienced mining executives.
He said Indago had shelled out about $20 million over the past two years for a pitiful return. During this time, Indago shares had plunged from more than $4.
"Indago chewed up a whopping $4.87 million in administration costs in the nine months to March while spending just $3.18 million on exploration," Mr Kestell said.
"And it's hardly surprising given that their last full-year accounts reveal they outlayed more than $300,000 on rent for luxury offices, about $550,000 on travel and racked up foreign exchange losses of more than $675,000.
"This is an appalling way to manage shareholders' money and it is time for the directors to go."
Mr Kestell said GoldLink had persuaded three of WA's most respected and successful mining executives to stand for election to the Indago board.
"Miles Kennedy, Karl Simich and Matthew Fitzgerald have a proven track record in exploration, project management and mineral production and shareholders have a golden opportunity to benefit from their vast experience," Mr Kestell said.
Mr Kennedy said Indago had bounced from one project to the next over the past three years and shareholders deserved far higher standards of performance from the board.
"One minute they were in base metals and tin, the next it was uranium and now they claim to be a gold company," Mr Kennedy said. "We want to bring some direction and experience to the board to improve returns for all Indago shareholders."
