Kenmare Resources plc (KMR) Earnings Call Transcript & Summary

Hello, and welcome to the Kenmare Resources PLC Extraordinary General Meeting. [Operator Instructions] Today, I'm pleased to present Michael Carvill, Managing Director. Michael, Please go ahead with your meeting.

Thank you, Maxine. Good morning, and welcome to this Extraordinary General Meeting of Kenmare Resources PLC. 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 offices at Styne House in Dublin with Tony McCluskey, Kenmare's Financial Director and our Company Secretary, Chelita Healy. We are joined on conference facility called by our Chairman, Stephen McTiernan, some of our other non-executive directors, our legal advisers and members of our senior management team. We are conducting this EGM in accordance with the Irish Government COVID-19-related public health measures and public health advice until we have recommended shareholders vote by proxy rather than attend the meeting. Tony, Chelita and I are present in Styne House and are maintaining physical distancing. As Kenmare's Chairman, Stephen is unable to physically attend this meeting, I shall be acting as Chairman of this meeting in accordance with the Articles of Association of the company. This meeting has been convened for the specific purpose of considering a resolution relating to the proposed tender offer to repurchase up to 13.5% of the company's issued ordinary share capital. The tender offer is for a maximum of GBP61.8 million, and is to be funded from our existing and available cash resources and borrowings under the Group's borrowing facilities. The tender offer is being made to eligible shareholders at the tender price of GBP4.17 per ordinary share. Usually, we enjoy the opportunity general meetings provide to meet and communicate with our shareholders. But as in the case of this year's AGM and our EGM approving the migration to Euroclear Bank, it is just not possible at the moment to have a meeting in the ordinary way. On this occasion, we have recommended that shareholders exercise their rights by voting in advance through the appointment of proxies, and we have also invited shareholders to follow these proceedings by this conference call. The situation is far from perfect, but we will endeavor to keep the proceedings as informative as the legal requirements for general meetings will allow. Let me briefly explain the nature of our business here today. We are proposing to repurchase up to 13.5% of the company's issued ordinary share capital by the way of a tender offer conducted by our brokers, Peel Hunt LLP. This executes on our stated intention to increase shareholder returns after the successful completion of our major capital projects and is supported by strong operational performance of the Group and commodity market in 2021. In our financial results for the 6 month period ended 30th of June 2021, the Group reported profit after tax of USD 48 million in H1 2021. H1 2020 was USD 12.7 million. We believe that our return of capital is in the best interest of the company and its shareholders as a whole as it provides shareholders with both choice that is in discretion participated and ability to realize value without incurring fee. A return of capital this nature represents an effective use of shareholders' funds and the board is of the opinion that the continued strength of the Group's balance sheet and its cash flow generation after the return of those funds will be sufficient to pursue the good strategic objectives. The terms and conditions of the tender offer are set in the circular to shareholders dated the 16th of November 2021. The tender offer will close today at 1 PM. I would now like to invite questions from shareholders on the conference call. Please direct your questions to me, and I will either answer them or redirect them to one of my colleagues on the board. If you do not have a question, I would ask -- if you do have a question, I would ask that you state your name, and if you are a proxy, the name of the shareholder that you represent. If you have more than one question, please state all your questions. Now I'd like to hand over to the host. Maxine?

[Operator Instructions] We currently have no questions registered. So I'll hand it back to you, Michael.

Thank you, Maxine. I'd 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 the 16th of November 2021. Accordingly, the requisite notice of the meeting has been given. I propose the [indiscernible] with your consent, the notice of the meeting should be taken as well. Let me outline the voting procedure that we will follow today. Given current Irish public health measures and public health advice, which has impacted on shareholder attendance at the meeting and in accordance with the Articles of Association of the company, voting will be done by way of a written poll on a resolution of the meeting. This allows you, our shareholders, the opportunity to participate in the decision-making of the company and have your votes recorded in proportion to the number of shares you hold. We have appointed Computershare, the company's registrars to act as scrutineers. For convenience, I will direct the poll on the resolution -- I will direct that the poll on the resolution would be held at the end of this Extraordinary General Meeting. EGM Resolution. Authority to make market purchases and overseas market purchases pursuant to the tender offer. We will now proceed to vote on the resolution, which I will formally propose in the meeting. The full text of the resolution is set out in the notice of the meeting, a copy of which you will have received. Implementation of the tender offer requires approval by resolution of the shareholders. The resolution will be posted as a special resolution to authorize the company to make overseas market purchases of ordinary shares tendered -- pursuant to the tender offer. Under Section 1074 of Companies Act 2014, before a company can make market purchase of its own shares, they must obtain the authority of its shareholders in a general meeting to do so. The resolution proposes to authorize the company to purchase up to the maximum number of ordinary shares at a price not less than and not greater than the tender price, which is GBP4.17. This authority is in addition to the authority granted to the company at the Annual General Meeting on the 13th of May 2021 and will expire on the 31st of March 2022. The approval of the resolution requires not less than 75% of those voting at the EGM in person or by proxy to vote in favor of the resolution. I now propose this resolution as a special resolution. The full text of the resolution is set out in the notice of the meeting. The poll on this resolution will be hand at the end of the Extraordinary General Meeting. Now let me turn to the voting procedures. I direct that a poll be taken on the resolution which has been put to the meeting. Let me explain the procedure for conducting a poll. Votes may be given by the registered holders of ordinary shares present here, in-person or by proxy, and entitled to vote, that is Tony, Chelita and me. Every such shareholder 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 registered members and the list of authenticated proxies received by the company. Computershare will report the total of the votes cast for and against the resolution 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 the resolution will be announced via the usual channels and on the company's website. Ladies and gentlemen, subject to the poll results, that concludes the business of this meeting. As there is no other business, I shall 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, and have a good Christmas. Thank you very much.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.