Charging that current management has "squandered" Noront Resources' (NOT-V, NOSOF-o) first-mover advantage in the "Ring of Fire" area it discovered last year, shareholder Rosseau Asset Management is looking to oust the junior's board at its annual meeting on Oct. 23.

In a dissident circular issued on Oct. 9, the Toronto-based hedge fund company, which owns 9.2% of Noront's shares, says the junior is suffering from a lack of focus in the McFauld's Lake area of Ontario, where it set off a frenzy of staking and exploration activity with its high-grade Eagle One copper-nickel-platinum group elements find.

"Noront has squandered opportunities, wasted substantial monies on non-core properties, diluted its property interests through option agreements and made exaggerated claims that have never materialized," says the Rosseau circular.

Although Rosseau says it has faith in Noront's McFauld's Lake projects, it says that an unfocused leadership and exploration strategy has led the company to dilute its resources by entering 11 different option agreements rather than consolidating ground in its core project area, in the remote James Bay lowlands.

Rosseau also blames the company for failing to follow through on matters such as listing on the main board of the Toronto Stock Exchange, spinning off non-core properties, and replacing president and CEO Richard Nemis.

Noront stock closed up 22% on news of the proxy battle on Oct. 9.

Rosseau's proposed new directors include: Rosseau president and chief investment officer, Warren Irwin; Patrick Anderson, former president and CEO of Aurelian Resources (which was taken over by Kinross Gold [K-T, KGC-n] last month); Bruce Durham, chairman of Temex Resources (TME-V, TMXRF-o); Joseph Hamilton, president of Pickax International and a former Aurelian director; Keith McKay, former chief financial officer of Aurelian; Thomas Obradovich, chairman of Independent Nickel (INI-T, INIFF-o)and a former Aurelian director; and Michael Woollcombe, a partner in law firm Voorheis & Co.

To be successful, Rosseau needs just over 50% of Noront shares to be voted in favour of its proposed slate of directors.

In a press release, Noront management urged shareholders to re-elect the company's current board and reject Rosseau's proposal.

"Noront's special committee and board of directors believes Rosseau's action is not in the best interests of Noront shareholders," the company said. "It is an opportunistic attempt, in light of extraordinary recent market conditions, to obtain control of Noront through control of the board."

The company said it had formed a special committee of independent directors to address Rosseau's concerns, but that Rosseau had rejected a compromise proposal for changes to the company's board and management.

Rosseau's Irwin declined to comment on record about the action, referring The Northern Miner to its circular.

Chairman of Noront's special committee, Paul Parisotto, notes that Rosseau is a minority shareholder, with less than 10% of Noront shares. By comparison, he says, the committee was formed to maximize value for all shareholders.

"I think it's important that the shareholders recognize what the company has done in the past twelve months and in difficult markets -- especially right now," Parisotto says. "People forget that in less than twelve months you've got a high-grade nickel-copper discovery, you've got a second discovery behind that, and you've got the two chromite discoveries. That's a pretty short period to accomplish that."

Parisotto said the company would be responding in detail to the Rosseau circular shortly, through a letter to shareholders, but did respond to Rosseau's allegation that Noront is not focused enough on its core discoveries.

"Generally speaking, (Noront has) a lot of land and the company has focused on its high-priority targets in and around its discoveries," meaning its Eagle One and Two massive sulphide deposits, and its chromite discoveries, Blackbird One and Two, he says.

The company controls 100% of 486 sq. km of land in the Ring of Fire and has joint ventures on another 680 sq. km.

Noront listed some of its recent accomplishments in its press release, including its aggressive exploration program in the McFauld's Lake area, new appointments to its board and management team that have brought added skills and experience to the company, work on its "strategic" chromite projects, and the compilation in July 2008 of a resource estimate at its Eagle One deposit -- which it says is rich enough to consider direct shipping of mineralized material.

Indicated resources at Eagle One, part of Noront's Double Eagle property, stand at 1.8 million tonnes grading 1.96% nickel, 1.18% copper, 1.12 grams platinum per tonne, 3.91 grams palladium, 0.15 gram gold and 3.81 grams silver. The deposit also holds 1.1 million inferred tonnes averaging 2.39% nickel, 1.27% copper, 1.37 grams platinum, 4.5 grams palladium, 0.13 gram gold and 4.21 grams silver.

The company said it was committed to following "four cornerstone elements to enhance shareholder value in difficult economic conditions," including: balancing exploration and development with the need for prudent spending, creating greater awareness of its core discoveries, exploring "strategic opportunities" with the aim of expanding its projects to an economic size; and exploring direct shipping opportunities to improve the mining value proposition of its projects.

But according to Genuity Capital Markets analyst Michael Gray, Rosseau's concerns are legitimate, echoing those he's written about since beginning coverage of Noront in January.

In particular, Gray is concerned about the level of technical nickel expertise in the company, as well as "levels of technical disclosure you would expect for a discovery of this stature in a new belt," he says.

"I've written numerous times this company needs more nickel exploration experience -- it's a bit of a different animal to explore for and these guys don't have it," says Gray, who has a nickel exploration background himself, including five years as a project geologist working on exploration and development projects with Falconbridge.

The company, which has a burn rate of about $4 million per month, should be smarter about how it spends its money and more "surgical" in the way it targets conductors with drilling, Gray says.

While there have been recent improvements to the junior's management team, Noront's lack of nickel experience at the board and management level is affecting its stock value, and even its ability to attract talent, Gray said in a note to clients.

"Discussions with our nickel industry contacts over the past six months have led us to believe Noront's board and management team are an impediment to attracting nickel-related expertise," Gray wrote.

He also agrees with Rosseau that there's been a lack of focus on Noront's flagship project -- illustrated by its decision to spend $15 million on the Windfall Lake project in Urban Twp., Que. Even though the company will get back about 45% of money spent on exploration there from the provincial government, Gray questions the choice.

"This is a project that I've given very, very little value to," he says. "It's a tough one. They've gone underground and they're spending a lot of money chasing erratic high-grade gold that they couldn't string together on surface."

And Gray agrees with Rosseau that management has been overly promotional, leading to unrealistic expectations of the company.

For all those reasons, he concludes: "there does need to be a management and board shakeup."

As for Rosseau's proposed Aurelian- heavy slate of directors, Gray said in his note that the lineup would represent "a significant upgrade to the current Noront board in terms of focus, vision and capital markets leadership."

In an interview, Gray added: "I think that they're certainly not steeped in senior mining nickel experience per se, but I do like the culture of high technical standards and disclosure and corporate governance that they would bring to bear."

Two proposed directors, Irwin and Woollcombe, have indicated they would step down if suitable replacements were found, which Gray interprets as individuals with experience in nickel exploration and development.

Noront stock closed up 21¢ at $1.16 on the news on a volume of 1.1 million shares, and at presstime, was trading at $1.28 per share. It has traded in a 52-week range of 90¢-$7.42. The company has 129.8 million shares issued.

Sprott Asset Management holds about 9.9% of Noront shares, with Pinetree Capital holding about 7.9%.