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BILLINGS, Mont. (AP) â¿¿ The chief executive of a Montana mining company urged shareholders on Wednesday to reject a takeover by a group that includes former Gov. Brian Schweitzer.
Stillwater Mining CEO Frank McAllister said a takeover could hurt the company's growth at a time when it's well-positioned to profit from anticipated increases in platinum and palladium prices.
The comments came as the state's largest publicly traded mining company kicked off a six-week campaign to stall the takeover bid ahead of a May 2 annual shareholders meeting.
Schweitzer and the Clinton Group, a New York hedge fund, have criticized Stillwater's expansions into Argentina and Canada as uncertain prospects that already have cost the company hundreds of millions of dollars.
They blame McAllister and want to oust him and install new directors, including Schweitzer.
Clinton Group owns just over 1 percent of Stillwater Mining Co., and Schweitzer is a minor shareholder. But they hope to capitalize on investor concerns over the company's foreign expansions, after share prices dropped by about two-thirds since McAllister took over as CEO in 2001.
McAllister said in a Wednesday interview with The Associated Press that the dissident group does not understand the nature of mining. And he warned against a sale of the company's Argentina copper reserves any time soon as "value destructive" given current the market. He said the copper project was pursued as "insurance" to protect against low prices for palladium.
"Mining is a long-term proposition. You can't do this on a short-term basis," McAllister said, noting that the stock price has closely correlated with precious metals prices.
He said the company already is pursuing one of the primary goals outlined by Schweitzer and the Clinton Group â¿¿ the expansion of mines in the Beartooth Mountains in south-central Montana.
In the past two years, McAllister said, the company's workforce increased more than 20 percent to 1,664 employees. It could increase even more as the expansions come on line, he said.