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Sherritt to allow investor vote on dissident directors

Security helmets displaying the logo of Sherritt International can be seen in front of a picture of Fidel Castro at Energas, a natural gas plant run as a joined venture between the Canadian company and the Cuban government.

Fernando Morales/The Globe and Mail

Sherritt International Corp. will allow its investors to vote on a dissident shareholder's slate of directors at its upcoming annual meeting, the Canadian mining company announced on Friday.

The annual meeting, which was set for May 6, will be combined with a special shareholder meeting after one of Sherritt's major shareholders, Clarke Inc., demanded boardroom changes.

The proxy fight comes as Sherritt's shares are trading near all-time lows, hurt by falling nickel prices and delays with one of its key nickel projects in Madagascar. Sherritt also has major energy and mining assets in Cuba.

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Although Sherritt said it found inconsistencies and "deficiencies" with Clarke's requisition for a special shareholder meeting, the company said it would proceed with it.

Clarke, which holds a 5.1-per-cent stake in Sherritt, had filed the shareholder requisition Dec. 23 asking the company to shrink its nine-member board to seven and to install Clarke's chief executive George Armoyan and two of Mr. Armoyan's associates as directors.

Sherritt said Clarke's requisition contained an inconsistency because it asked for the removal of four directors and the election of three, which would make an eight-person board instead of seven as requested by Clarke.

As well, Sherritt said shareholders would have to approve the reduction in the number of directors.

Sherritt's announcement comes one day after Mr. Armoyan and Sherritt's chairman Harold (Hap) Stephen met to discuss Clarke's demands.

Sherritt's board said it would consider Mr. Armoyan's nomination as part of the normal director nomination process, but Mr. Armoyan rejected the offer.

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