Boardroom battle brewing between Aberdeen International and U308 Corp.

Aberdeen International (AAB-V) wants to kick out members of the board of U308 Corp. (UWE-V) and replace them with its own slate of directors because it is “disappointed” with the company’s management and believes the junior uranium explorer, in which it holds a 10% stake, “should be doing better than it is.”

“The uranium sector has gone through a real shakeup and there is a big opportunity for consolidation,” Stan Bharti, Aberdeen’s executive chairman, declared in a conference call on June 17.

“We think U308 could be used as a perfect vehicle to acquire two or three other companies, consolidate, and build something bigger. We think uranium prices will strengthen and come back so we’re very optimistic.”

Richard Spencer, chief executive and president of U308, told The Northern Miner that he and his management team will fight Aberdeen’s efforts to take control of the company.

Spencer argues that U308, like many companies, has been subject to the decline in the North American capital markets in general and the uranium sector in particular.

U308’s stock on the TSX Venture Exchange has fallen from its high of about $3.36 per share in early January to about 70 today.

U308 holds about C$18 million in its treasuryequivalent to about 78 per share in cash. At its current share price of about 70, U308 is trading at an 11% discount to cash.

“Junior uranium stocks as a group have experienced falling share prices, but few (if any) to the extent of U308,” Aberdeen asserted in a June 16 press release.

Aberdeen acquired its shares in U308 from September to November last year at an average cost of $1.65 per share.

But Spencer contends that the company has been caught in the same down draught as other companies in the sector and cites as examples Xemplar Energy (XE-V), Western Prospector (WNP-V), and Cash Minerals (CHX-V).

Xemplar Energy, which has uranium exploration projects in the Wernecke uranium district of the Yukon and Labrador, has plummeted to 91 per share from $7.50 per share on January 2. Western Prospector, which has uranium properties in Mongolia, has dropped to 70 from $1.02 per share on January 2, while Cash Minerals, with properties in Namibia, has slid from 47 to 27 per share during the same period.

“You can pick any uranium junior and the pattern is the same, unfortunately,” Spencer says. “What differentiates us from [the other] uranium juniors is that we have three [drill] rigs turning in the fields. In my view, as long as we keep exploring and doing what we’re doing we’ll eventually get recognition from the market.”

Spencer points out that U308 expects to have completed its first National Instrument (NI) 43-101 resource on its Guyana properties by the end of the year. “A lot of institutions don’t take you seriously until you have an NI 43-101 compliant resource so that is one of our priorities,” he says.

The chief executive of U308 worries that Aberdeen will use the $18 million in its treasury to joint-venture with other companies that may be strapped for cash and that the money willbe used for other purposes rather than for exploration in Guyana. “We have a lot of cash and I think that is what the appeal is,” Spencer says.

“The present board’s view is that the majority of that $18 million is required to develop the projects in Guyana or to continue exploration there, so if you take away significantly from that cash position it’s unlikely that Guyana exploration will come to a logical conclusion.”

But Aberdeen sees it quite differently. From a geological perspective the properties in Guyana are promising but require “a more focused uranium exploration program,” argues George Fraught, Aberdeen’s chief executive. U308 needs to broaden its uranium property portfolio but it appears to be uninterested, he adds. “We remain concerned that they are burning the treasury with minimal results,” Fraught maintains.

U308 has two reconnaissance permits to conduct geological and geophysical surveys on adjacent lands covering an area of about 1.33 million hectares in western Guyana.

Guyana, slightly smaller than the size of England, lies on the northern coast of the South American continent, with its southern half forming part of the Amazon Basin. It is bound on the north by the Atlantic Ocean, on the east by Suriname, on the south-west by Brazil and on the north-west by Venezuela.

U308 argues that while it agrees with Aberdeen’s view that the junior uranium sector is ripe for consolidation, its management has already begun looking at potential acquisitions, joint ventures and business opportunities itself and that they are being “very, very, carefully selected.”

Its checklist for investment includes reasonably funded, first-rate properties preferably with an existing resource in jurisdictions in which permitting is not an absolutely formidable task. “Given those criteria there are very few companies that fall in that group and we’ve identified them and we’re talking with them,” Spencer says.

“We agree with the sentiment that there is going to be consolidation but we’re determined that U308 is going to be part of a very meaningful consolidation where we’re not just diluting shareholder value and that we’re going for very, very specific target companies,” Spencer explains.

Wherever the truth lies, Aberdeen argues that its alternative slate of directors has more experience in the resource sector and the uranium sector specifically and a better track record of delivering shareholder value.

The list it is putting forth consists of Stan Bharti as chairman, Fraught, Pierre Pettigrew, Douglas Bache and Perry Dellelce. Bharti, who is currently executive chairman of Aberdeen, said Spencer could remain on the board if he chose to do so.

Bharti is a professional mining engineer with over 25 years of experience in mergers and acquisitions. Fraught, currently chief executive of Aberdeen, is a chartered accountant whose previous jobs included president and chief executive of First Uranium Corp. (FIU-T).

Pierre Pettigrew is currently an executive advisor to Deloitte Touche Tohmatsu, but is best known for his stints as a cabinet minister. He served for ten years as Minister of Foreign Affairs and Minister for International Trade.

Bache is a former senior manager at Inco and North American Palladium (PDL-T, PAL-X), while Dellelce is a partner in Wildeboer Dellelce, a Toronto based law firm.

Spencer says the proposed candidates are more financially oriented with Bharti serving as a director on the boards of numerous other companies, but argues that U308’s board “is loaded with people who have a history of making exploration discoveries” and is “well suited to the task.”

U308’s current board includes heavyweight Patrick Anderson, currently the president and chief executive of Aurelian Resources (ARU-T, AUREF-O) and Keith Barron, a co-founder and director of Aurelian Resources.

Bryan Coates is vice president finance and chief financial officer at Osisko Exploration (OSK-T, OSXLF-O) and prior to that served as vice president financial and chief financial officer of Iamgold (IMG-T, IAG-N) and Cambior.

David Constable has worked as a professional geologist for more than 25 years with Noranda Group, the Ontario Ministry of Northern Development and Mines, and managing his own geological consulting company

Apart from the board and the direction it is taking the company, Aberdeen’s other complaint is that U308 has not given it a list of their shareholders so that they can communicate with them and relay their grievances.

“There are a number of shareholders, including sophisticated institutional shareholders that share out concerns and will support our proposed alternative slate of directors and our new approach,” Fraught says.

Aberdeen, a resource merchant bank created about a year ago, is focused on the junior resource sector. The Toronto-based firm raked in revenues of C$18 million before tax in the first quarter and at its current stock price of 61 a share is currently trading at below its
net asset value of $1.08 per share.

Aberdeen’s track record includes Desert Sun Mining (DSM-T, DEZ-X) and First Uranium, which were both led by the principals involved in Aberdeen. Desert Sun was acquired by Yamana Gold (YRI-T, AUY-X, YAU-L) for $735 million in 2006 and First Uranium completed an initial public offering in 2006 and today has a market capitalization of more than $800 million.

Aberdeen says its big win so far this year was the sale in May of Quinto Mining (QU-V), in which it held an 11.25% stake, to Consolidated Thompson Mines (CLM-T) for a gain of C$6-8 million.

U308’s annual and special meeting of shareholders is scheduled for June 26.