Meet Herbert Wirth, president of KGHM. No one in Kamloops has ever met this man except for his subordinates at Abacus Mines and yet Herbert Wirth will control the destiny of our city.
Mr. Wirth has been President of KGHM Polska Miedz SA, which is 32 per cent owned by the Polish government, since June 19, 2009. His vision is to extend the company’s investments outside of Europe and become a global leader in copper production.
His first move to meet that ambition was the purchase of a Canadian company Quadra FNX for just under $3 billion dollars early this year. Quadra has operations in Timmins, Ontario, the U.S.A. and in Chile. Based on the performance of the copper prices since the acquisition and the premium he has paid, the move has proven to be somewhat of a disappointment to shareholders.
In December of 2011 there was media speculation that Mr. Wirth might be fired by Poland’s treasury minister for opposing a new mining tax. He was also embattled with the treasury minister early this year over the company’s dividend policy.
This was all going on while shares in KGHM have been under considerable pressure and first quarter profit plummeted from 2.56 Euros per share in 2011 to 1.64. So far shareholders and the government of Poland are not impressed.
In January of this year Mr. Wirth was quoted to say that KGHM has approached numerous banks in Europe to provide loans to fund expansion and purchase new investments such as Polish utility company Tauron and develop Ajax Mine in Kamloops. According to the company’s March 31, 2012 interim financial statements no such bank financing was obtained.
On March 13, 2012 a registered letter was sent to Mr. Wirth and the supervisory board by the writer and endorsed by numerous local stakeholders inviting him to Kamloops to discuss the many concerns the residents of the City have about Ajax Mine. We were flatly declined. A subsequent letter was sent by City council with no better results. The 90,000 residents of Kamloops and the surrounding area are not impressed.
Furthermore, Mr. Wirth has no experience in the opening and operation of a low-grade open-pit copper mine in North America. If Ajax mine is approved, God help us all!