Home » Nickel 28 CEO Resigns Amid Scandal, Returns $2.3M in Shares

Nickel 28 CEO Resigns Amid Scandal, Returns $2.3M in Shares

Corporate Turmoil as Leadership Faces Misconduct Allegations

by Victor Adetimilehin

In a dramatic turn of events, Anthony Milewski, the CEO of Canadian mining company Nickel 28 Capital, has resigned and agreed to repay about C$3.2 million ($2.3 million) in shares, following an internal investigation that revealed serious misconduct. The company, based in Toronto and traded under the symbol TSXV: NKL, announced these significant developments this Tuesday.

 Leadership and Misconduct

The investigation, initiated by a special committee within the company, found that Milewski, along with other key executives including President Justin Cochrane and CFO Conor Kearns, engaged in actions that breached the company’s policies on insider trading, expenses, and ethics. These findings led to their dismissal on May 6, shaking the foundations of the mining firm they helped establish. The report led to a settlement in which Milewski will return nearly 5 million shares to Nickel 28, priced at C$0.65 each as of Monday’s market close.

Interim CEO Christopher Wallace emphasized that the settlement with Milewski was approved by the board based on the special committee’s recommendation, and deemed it essential for allowing the company to refocus on its strategic vision and future plans. There has been no similar settlement regarding Cochrane and Kearns, indicating potential ongoing legal challenges or further settlements.

Corporate Power Struggle and Market Implications

The backdrop to this executive upheaval includes a contentious power struggle involving a New York-based hedge fund, Pelham Investments. The fund, accused by the ousted founders of attempting to take over Nickel 28, has been a significant player in a year-long battle that saw dramatic shifts in the company’s board composition.

This internal conflict comes at a time when the nickel and cobalt markets face substantial challenges. Innovations in battery technology spearheaded by industry giants like Tesla are reducing the demand for cobalt, a key component in older battery formulations. Additionally, increased nickel production in Indonesia, backed by Chinese investments, has depressed global prices and led to the closure of several mines in Australia.

The controversies and challenges extend beyond internal governance and market dynamics. Nickel 28 has also encountered regulatory hurdles, notably a management cease-trade order sought after the company missed its May 30 deadline to file annual financial statements. Subsequently, on June 3, the Ontario Securities Commission imposed a trading ban on management from dealing in the company’s stock, which last closed at C$0.76 per share.

Nickel 28, with a market capitalization of C$62.7 million, holds an 8.56% stake in the China-operated Ramu nickel-cobalt mine in Papua New Guinea. The company also maintains a portfolio of 10 nickel and cobalt royalties across development, pre-feasibility, and exploration projects in Canada, Australia, and PNG, highlighting its extensive involvement in the global minerals market.

Looking Ahead

As Nickel 28 navigates through these tumultuous times, the focus remains on stabilizing its leadership structure and addressing the financial and regulatory challenges that loom large. The resolution of its leadership crisis and strategic adjustments in response to evolving market conditions will be crucial for its path forward.

 Source: Mining.com

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