Global Lithium Resources will shed directors, dock its chair’s pay and put its flagship exploration project on ice in the wake of an attempted board ousting and as prices for the battery metal languish.
The Mineral Resources and Hancock Prospecting-backed WA lithium explorer revealed a corporate and operational overhaul on Tuesday aimed at cutting costs to see through what it called a “protracted downturn in the lithium market”.
As part of cost-cutting measures GL1 will shed two board members — Greg Lilleyman and Hayley Lawrance— who aspiring director and property investor Leon Zhu has been calling to be axed as part of a campaign to appoint himself on the board since early August.
GL1 has pushed back on the appointment of of Mr Zhu, who it’s understood had expressed concerns about the company’s approach in developing the flagship Manna project 100km east of Kalgoorlie to the board last week.
“We would have preferred matters to be dealt with internally. It seems they’re (GL1) now responding to the documents we expected to have released tomorrow,” Mr Zhu’s lawyer Tim Houewling of Cornerstone Legal said.
GL1 said on Tuesday that its “budgets and operations have been under constant review by the board for some time, with protection of the balance sheet and capital assets uppermost in mind.”
GL1 has said in late August that it did not understand “how Mr Zhu’s experience in property will enhance the key skills of the GL1 Board”.
On its LinkedIn page Sincerity Group describes itself as a “comprehensive real estate property development company” specialising in residential developments. Mr Zhu has been CEO of the company for 15 years, according to his LinkedIn.
The explorer will also seek to delay a shareholder vote on whether Mr Zhu should be added to the board until the company’s AGM on November 28, escalating the matter to WA’s Supreme Court.
GL1 said it wanted to “reduce costs” of having two meetings close together, “ensure all corporate governance issues have been resolved” and “understand any remaining issues which Sincerity has (if any), given this announcement and the corporate and operational changes being implemented by the Board”.
Amid the board disruption and bid to cut costs executive chair Ron Mitchell will drop from a full-time role to two days a week, for which he will be paid $243,000 per annum plus super. He was paid $350,000 plus super in his full-time managing director role, prior to becoming chair at the start of July.
Global Lithium said it has about $25.2 million in the bank and would “return to finalise the DFS (definitive feasibility study) when markets support the funding required to commence construction of the Manna lithium project.”
Notices filed with the ASX show Sincerity Development, controlled by Liaoliang (Leon) Zhu, had been steadily building a 6.93 per cent foothold in GL1 since October 2023 in transactions totalling more than $8 million.
GL1 fended off several notices from Sincerity thorugh August. Mr Zhu had initially been attempting to add a Mr Barry Mitchell to the board, but that notice has since been withdrawn.
GL1 owns two lithium projects in WA, the Manna project about 100km east of Kalgoorlie and the Marble Bar project 150km south-west of Port Hedland in the Pilbara.