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PMI s Buck backs Keegan despite deal collapse
PMI's Buck backs Keegan despite deal collapse

PMI Gold chairman Peter Buck says he does not resile from his company's planned merger with Canada's Keegan Resources, despite the collapse of the deal.

The two companies called off the $670 million tie-up yesterday morning after major shareholders including Macquarie Group, Taurus Capital Management and Acorn Capital voted their holdings against the deal. Their opposition meant a key condition of the proposed merger, that 67 per cent of PMI shareholders voted in the favour of the deal, could not be met.

But Mr Buck told _WestBusiness _ yesterday the PMI board, which unanimously recommended the Keegan merger, had won the support of the majority of its shareholders. He said the proxy count, with about 70 per cent of Keegan shares voted, had run 56 per cent in favour of the deal.

"If we had needed a simple majority - if PMI had been the acquirer, and some legal issues hadn't got in the way of that - this would have got across the line," he said.

"That's what the 56 per cent support means," he said.

With the entire board facing a shareholder vote at PMI's next annual meeting, in April or May, it is understood some of those dissenting shareholders could agitate for change at the board level.

Mr Buck gave no indication yesterday that he was considering resigning before that meeting.

The resources veteran said he would be meeting with shareholders over the coming weeks, including those opposed to the Keegan merger but he stood by his record since PMI listed on the Australian market in late 2010.

"We delineated 4.5 million ounces in the first nine months," Mr Buck said.

"That was taken into pre-feasibility within 12 months, and in 18 months it went through the approval of a definitive feasibility study. And since that time we've been working on our approvals, it's taken a little longer than we'd like, but we all know that's life. And that's not just the board, but also management - so I think the record stands for itself."

Mr Buck said PMI had continued to work on debt financing for its Obotan gold project in Ghana since the Keegan merger was announced in early December. "It's a great deposit, and we need to get it developed," he said. "And importantly we can also see the discovery potential in the region, so we're focused on that as well."

PMI shares closed up 1¢ to 65.5¢ yesterday.