Argonaut, Tribeca Investment Partners, Nero Resource Fund and United Funds recently launched section 249D proceedings to remove Abyssinian directors Stephen Miller and Bruce Tinney and replace them with First Quantum Minerals co-founder Martin Rowley, Sigma Lithium Corporation chief operating officer Brian Talbot and Argonaut co-founder and executive chairman Eddie Rigg.

The group said the action was driven by corporate governance, funding and project ownership concerns.

However, a letter to shareholders from Abyssinian described the concerns as being "unfounded and totally without substance" claiming the S249D action was an attempt to acquire control of the company without reasonable payment.

According to Abyssinian, it had received and rebuked unsolicited offers from the minority shareholders in the past to buy out the founding directors' stakes, including the most recent offer at A$1.25 per share.

It denied allegations about the basis for issuing milestone shares to the board, claiming the vesting conditions had been agreed upon and formalised by Argonaut, and rejected an assertion the directors were attempting to extend performance rights without approval.

Kenticha

Abyssinian holds 51% of the Kenticha lithium project in Ethiopia, which it describes as one of the great lithium-caesium-tantalum projects of the world.

Kenticha produced tantalum for 27 years until 2017 and has a JORC inferred resource of 87.7 million tonnes at 0.78% lithium oxide for 680,000 tonnes of contained lithium.

Abyssinian refuted the shareholders' claims it did not have ownership of Kenticha and said the license was renewed in January.

The company reports that drilling to increase the resource is underway, as is metallurgical test work.

A 30-person tented camp has been established at site and the company says it is in the process of building a fence around the camp and proposed processing site.

Two dense media separation plants have been built in South Africa and are currently being prepared for shipment to Ethiopia later this month.

Abyssinian is aiming for the smaller 20 tonne per hour plant to start commissioning in November.

The company attended last month's Fastmarkets Lithium Supply and Battery Raw Materials Conference in Nevada and said it had productive meetings with potential offtake and downstream partners.

Funding

One of the major claims of the shareholder group was that Abyssinian could be insolvent.

But the company said it had US$1.23 million in cash as of July 7 and had recently raised $25 million via a convertible note financing at A$1.50 per share in New York.

Abyssinian said the requisitioning of a shareholders' meeting had not included details of a financing strategy for the company and the development of Kenticha, though Argonaut said it planned to undertake a $20 million raising at $1 per share, a 33.3% discount to the convertible note financing.

The company said an equity line of credit of up to US$100 million was attached to the convertible note funding that would be available once it had listed on the London Stock Exchange via a proposed reverse takeover of shell company Medcaw Investments, announced last week.

Abyssinian said it had also held meetings in New York with a well-known US family office interested in investing in the company and said it was confident a letter of intent could be signed in the coming weeks.  

London-based Tristan Jenkins has recently been appointed as chief financial officer.

The company's executive chairman, Neil Warburton, described the recent financing as an endorsement of the current board.

The shareholder vote is scheduled to be held in Perth on Friday, July 28.