Guyana Goldfields' Aurora mine is seen from above. Courtesy of Guyana Goldfields

The day of Guyana Goldfields’ third-quarter 2018 results was the final straw for its founder and former chairman, Patrick Sheridan. The company revised down its 2018 production guidance for its flagship Aurora mine for the second time that year – to between 150,000 and 155,000 ounces of gold at an all-in sustaining cost (AISC) of US$1,025 to US$1,050 per ounce, down from its original projection in February of between 190,000 to 210,000 ounces at an AISC of US$830, to US$880 per ounce – and placed the blame on Aurora’s “resource model.”

In response, its share price fell by 47 per cent that day, to finish at $1.62 on the Toronto Stock Exchange.

“Obviously the stock’s had its ups and downs over the years, but I really think questioning the resource model was the straw that broke the camel’s back,” Sheridan said in an interview with CIM Magazine. He said the company’s management tried to “cover up” an “inability to execute on a business plan” by questioning the geological model. “That’s the day I resigned from the company as a member of the board of directors.”

Sheridan is leading a small group of shareholders who allege Guyana Goldfields’ board of directors has overseen a “period of prolonged value destruction,” and on Wednesday called for a special shareholder meeting to replace the board.

Guyana Goldfields said on Wednesday it would review the requisition and respond “appropriately in due course.”

The company said its board of directors “remains committed to constructive dialogue and engagement with all shareholders.”

The shareholders, which own 5.4 per cent of the company’s shares and call themselves the Concerned Shareholders, includes Sheridan, investment company Northfield Capital Corporation and its founder Robert Cudney, PDAC distinguished service award-winning financier Donald Ross and his wife Gretchen Ross.

“I wish that I was not the one that had to lead this charge, to be frank, but I didn’t see anyone else out there,” Sheridan said. “I do think it’s necessary, and I think [the company] needs to get fixed.”

Related: Hudbay Minerals shareholder demands special meeting to halt acquisition plans

The Concerned Shareholders plan to nominate a slate of six directors, including Doug Kirwin, who has held positions at Ivanhoe and Anglo American; Luc Lessard, who has worked at Canadian Malartic, Osisko Mining and Falco Resources; and Carmen Diges, the general counsel at McEwen Mining. Sheridan said they will also push for a change of senior management if their board slate is elected.

The group alleges Guyana Goldfields’ board has made misleading statements and “questionable decisions” regarding Aurora, which Sheridan attributed to difficulties executing on the project’s updated life of mine plan, which was released in February 2018.

He said once he raised concerns about the company’s inability to keep up with the project’s stripping demands and delays in hiring a “competent foreign contractor,” he was let go from his management position in July.

The Concerned Shareholders also say the company’s relationship with the Guyanese government has significantly deteriorated.

In November, despite a request from the Guyanese Environmental Protection Agency in late October to hold off on underground work until the company received a permit, it announced on Nov. 9 it had begun blasting the mine portal. Ten days later, the company said it had temporarily suspended that work.

“In spite of notice given to not commence activities, you have blatantly disregarded the Agency’s directives, and [have] been in direct contravention of the Agency’s laws and regulations,” the agency wrote in a letter to the company, which was seen by a Guyanese newspaper.

“In all countries, particularly in developing countries, your license to operate is integral to the operation itself; it’s one of the key ingredients for successful mines,” Sheridan said. “Issues like this, not only are they avoidable but they’re completely unnecessary with proper planning.”

In addition to calling for a new board, the shareholder group said it is looking for a shareholder mandate to establish an ethics committee at the company, and create a special committee that will lead a strategic review of Guyana Goldfields.

Guyana Goldfields is the latest on a growing list of mining companies with proxy battles on their hands. Hudbay Minerals’ activist shareholder Waterton Global Management said in December it would put forward a majority slate of directors in May, and a candidate for CEO, after calling in October for a halt to the company’s acquisition plans. Also in December, billionaire John Paulson’s hedge fund successfully ousted five of eight Detour Gold board members, and prompted interim CEO Michael Kenyon’s resignation.