Dominion Diamond chairman to step aside, dissident shareholders OK new directors

TORONTO – Canada’s largest publicly traded diamond company has responded to shareholder disapproval by announcing two new directors, including a veteran miner who will become chairman of its board by April 30, if not sooner.

Dominion Diamond’s current chairman, a former CEO of the company, said he’s prepared to hand over the job to veteran mining engineer Jim Gowans “in the near future.”

“Both the company and I have faced certain changes recently,” Dominion Diamond chairman Robert Gannicott says in a statement issued from Yellowknife, capital of the territory that’s home to the Toronto-based company’s mining operations.

Gannicott mentioned he had “medical challenges” but didn’t elaborate.

The company also announced it was appointing Josef Vejvoda, whose has experience in information technology and Canadian capital markets, as another new director upon the recommendation of a group of shareholders that have demanded changes.

Dominion Diamond said the dissident group has accepted to a “standstill” agreement as a result of the appointments.

Dominion Diamond owns the Ekati diamond mine and a 40 per cent share of Diavik _ Canada’s largest diamond mine _ both in the Northwest Territories.

The appointments announced Wednesday fill vacancies that opened just before Christmas, when two independent directors resigned.

Their departures come just days after a group of Dominion Diamond shareholders publicly called on the company’s independent directors to deal with the “misguided policies and missed opportunities” that have hurt their investment.

The group — led by K2 & Associates Investment Management Inc. — said it recognized that the mining industry faces :headwinds” but believed Dominion Diamond’s shares are “significantly undervalued by the public markets.”

Its shares closed Wednesday at $13.95 before the company’s announcement. Until six months ago they were worth more than $20 each and peaked in early June at$24.60 on the Toronto Stock Exchange. The recent stock price gives Dominion Diamond a total market value of just under $1.2 billion, according to TSX data.