Kenmare Resources plc (KMR) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Kenmare Resources Extraordinary General Meeting Conference Call. [Operator Instructions] I will now hand you over to Michael Carvill, Managing Director at Kenmare Resources. Please go ahead.

Good afternoon, and welcome to this Extraordinary General Meeting of Kenmare Resources. As the host just said, my name is Michael Carvill, and I'm the Managing Director of the company. A quorum is present, and I declare the meeting open. I'm here at the company's office at Styne House in Dublin with Tony McCluskey, Kenmare Finance Director; and our company Secretary, Deirdre Corcoran. We are joined on the conference call facility by our Chairman, Steve McTiernan, our other non-executive directors, our legal advisers and members of our senior management team. As a consequence of the COVID-19 emergency measures introduced by the Irish government, which require people to stay at home and restrict public gatherings, we have asked that shareholders refrain from attending this AGM. Tony, Deirdre and I are present at Styne House and are maintaining social distancing. As Kenmare's Chairman, Steve, is physically unable to attend this meeting, I shall be acting as the Chairman of the meeting in accordance with the Articles of Association of the company. This meeting has been convened for a specific purpose of considering resolutions relating to proposed changes to the process of -- for settling trades in our shares. These changes are required as a result of Brexit, and we'll see migration of security settlement in the company's shares moving from the existing system CREST, to the replacement system, Euroclear Bank. The company is required to hold this meeting by February 2021, at the least, in order to allow that migration to happen on time and with the rest of the Irish market by mid-March. So despite the pandemic, we are compelled to convene and hold this meeting now, despite the very difficult circumstances. Usually, we enjoy the opportunity general meetings provide to meet and communicate with our shareholders, but as in the case of this AGM, it is just not possible at the moment to have a meeting in the ordinary way. On this occasion, we have shareholders exercise their rights by voting advance through the appointment of proxies, and we have also invited shareholders to follow the proceedings by this conference call. The situation is far from perfect, but we will endeavor to get proceedings as informative as the legal requirements for the general meetings -- for general meetings will allow. I've asked that where possible questions be submitted in advance. Let me briefly explain the nature of our business here today. A number of resolutions are proposed, the passing of which is required to allow the continued electronic settlement of trades in the company's shares following the U.K.'s withdrawal from the European Union. Until the transaction and the shares of Kenmare have been sell-through a system called CREST. However, after Brexit, there will be no longer possible for our companies to use the CREST system, and Kenmare, like all other Irish incorporated and favorite plc's will have to migrate settlement to another system best within the EU, called Euroclear Bank. This is a necessity. There is no meaningful alternative for settlement, and while it will not materially affect the fundamental rights and benefits of shareholder have by owning their shares. Euroclear Bank system, which is an intermediate system, it is administratively and legally more complicated than the CREST system. For those of you who hold your shares in paper outside of CREST, there will be no change to what you own and how it is held. It is necessary under law to get your approval to make this change to the way it creates, and our shares have settled. And there we -- therefore, we request your approval to the resolutions being proposed today. Failure to pass the resolutions would result in adverse consequences for shareholders and put at risk to continued admission of the company's shares for creating and listing on Euronext Dublin under London Stock Exchange. The circular continuing the notice of this meeting sets a great deal of additional information on the settlement migration and how it is to be implemented. How shares are to be held following the migration and the range of rights and services that will be available via the Euroclear Bank system. Your attention is drawn to that information. As we have not received any questions from shareholders by email, I would now like to start the formal proceedings of this Extraordinary General Meeting. The circular containing the notice of this meeting was posted to shareholders on 23rd of December 2020. Accordingly, the requisite notice of the meeting has been given. I propose, therefore, that with your consent, the notice of meeting should be taken as read. Let me outline the holding procedure that we will follow today. Given the restrictions on shareholder attendance at the meeting and in accordance with the Articles of Association of the company, voting will be done by a poll or written vote on each of the resolutions put to the meeting. This allows you, our shareholders, the opportunity to participate in decision-making of the coupling and have your votes recorded in proportion to the number of shares you hold. We have appointed Computershare, the company's registers, to act as scrutineers. For convenience, I would direct the poll on all of the resolutions -- I will direct that the poll and all of the resolutions will be held at the end of this Extraordinary General Meeting. EGM Resolution #1. Shareholders consent to the migration. We will now proceed to vote on the resolutions, which I will formally propose to the meeting. The full text of each resolution is set out in the notice of the meeting, a copy of which you will have received. Ireland enacted the migration of participating Securities Act 2019, if this is to facilitate a common procedure for the migration of security's settlement for all listed companies incorporated in Ireland, such as the company, whose shares are currently held and settled to the CREST system. Resolution 1 is being proposed in order to satisfy those requirements of the migration act that the shareholders of the company's resolution to approve of the company, given its consent to the migration. If this resolution is approved, the final consent of the company to the migration will, subject to the whole Irish market migration proceeding, be given by a board resolution, notice of which will be published by regulatory announcement. It is expected that the Euroclear Bank service for our securities will be in operation by mid-March 2021. I now propose this resolution as a special resolution. The full text of the resolution is set out as Item 1 in the notice of the meeting. The Migration Act requires that the special resolution be approved at a general meeting, at which there is an attendance, at least 3 persons holding or represented by proxy, at least 1/3 in nominal value of issued shares in the company. The poll on this resolution will be held at the end of this Extraordinary General Meeting. EGM Resolution #2, amendment of Articles of Association. Resolution 2 is being proposed to approve and adopt EU Articles of Associations of the company to facilitate the new arrangements require as a result of the migration and to take account of changes introduced by the Migration Act. An explanation of the proposed changes to the Articles of Association is contained in the circular and a marked version of the changes has been made available on the website. A copy of the Articles of the Association of the company, as proposed to be adopted, has been signed by me as the Chairman of this meeting for identification purposes. I now propose that subject to the adoption of Resolution 1 and subject to the Board or a committee adopting a resolution to implement the migration as described in Resolution 1. The Articles of Association of the company, which have been so signed by may be approved and adopted as a new Article of Association of the company to the exclusion of the existing Articles of Association of the company. I now propose the resolution as a special resolution with a poll on the resolution to be held at the end of the meeting as before. EGM Resolution #3, authority to the Directors to implement the migration. By Resolution 3, the company is requesting that shareholders authorize the Board to take certain procedural steps, which are not specifically provided far in the Migration Act, for which the Board considers necessary or desirable to implement the migration, including the authority to appoint parties to act as your agents in order to implement the migration. The adoption of Resolution 3 is conventional upon the passing of Resolutions 1 and 2. I now propose the resolution with the poll on the resolution to be held at the end of the meeting as before. Now let me turn to the voting procedures. I direct that the polls be taken on each of the resolutions which has been put to the meeting. Let me expand the procedure for conducting a poll. Votes may be given by the register of -- registered holders of ordinary shares present here and proxy are -- in-person or by proxy and entitled to vote. That is Tony, Deirdre and me. Every search holder has one vote for every ordinary share held. I will also vote on behalf of those holders who have sent a proxy instruction to the company, appointing the Chairman of the meeting to vote on their behalf. After the poll has been conducted, the votes cast will be verified under the scrutiny of Computershare by reference to the register of members and the list of authenticated proxies received by the company. Computershare will report the totals of votes cast for and against the resolutions and the number of withheld votes. The poll will take a little time to be conducted. Therefore, I am closing the meeting, following which, the results of the poll on all resolutions will be announced via the usual channels and on the company's website. Ladies and gentlemen, subject to the pool results, that concludes the business of this meeting. As there is no other business, I will now bring the formal business of the EGM to a close. I would like to thank you for joining us today. Many thanks to you all.