Letter to Shareholders of Roxgold Inc.
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 09/18/12 -- Roxgold Inc. ("Roxgold" or the "Company") (TSX VENTURE: ROG) updates shareholders on recent and ongoing developments with the Company.
Dear Shareholders:
We are reaching out to you to provide an update on the attempt by a dissident shareholder, Mr. Oliver Lennox-King, to elect his nominees to the board of Roxgold. The dissident has rejected every reasonable settlement offer made by the Company, and his actions raise questions about his true motives.
The new Roxgold team and strategy have been endorsed by both leading independent proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis & Co. (Glass Lewis), who recommended that shareholders of Roxgold vote their GOLD proxy in favour of our director nominees at the September 25, 2012 annual general meeting of shareholders (AGM).
The Dissident's Wrong Direction
Below are just some of the issues raised by the dissident's approach:
-- Wrong Management: Oliver Lennox-King proposes to let an inexperienced
leader, John Dorward, run your Company for at least the first several
months of the most critical time it has ever faced. Both the ISS report
dated September 9, 2012 (the ISS Report) and the Glass Lewis report
dated September 12, 2012 (the Glass Lewis Report) confirmed that Brett
Richards has more years of experience than the dissident's proposed
interim CEO and noted that Brett Richards has first-hand experience in
Burkina Faso.
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Brett Richards John Dorward
(Roxgold candidate) (Dissident candidate)
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Prior CEO experience yes no
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Independence from other board
members yes no
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Mine-building experience yes no
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Burkina Faso experience yes no
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Key local government and
stakeholder relationships yes no
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-- No Continuity: The dissident's all new slate of directors will force the
Company to start from scratch with a collection of people that lack
first-hand knowledge and established in-country relationships.
-- Wrong Team: The ISS Report stated that "... the dissident has not made a
compelling case that a further change to the board in favour of the
dissident nominees is necessary at this time." The Glass Lewis Report
stated that "...we see limited cause for shareholders to believe the
Company would benefit from the election of a dissident slate that does
not appear to have superior credentials or a superior plan." Further,
the dissident's slate is comprised of his colleagues with various
interlocking boards and corporate relationships, compromising their
independence.
-- Wrong Focus: Mr. Lennox-King is focused on controlling Roxgold, which is
particularly evident through his refusal to compromise with the Company.
-- Wrong Track-Record: The dissident has had a mixed track record,
including being involved in companies that have dramatically
underperformed. His track-record does not instill confidence in his
ability to safeguard and grow your investment.
-- Wrong "Plan": The dissident's technical plan involves conducting costly
and time consuming third party reviews of recent resource estimations,
validations of assaying techniques and sampling procedures. The
Company's quality assurance and quality control protocols have already
been recently reviewed by independent third parties. His "plan" will
cause the Company to lose the momentum it has worked hard to achieve.
Further, the dissident's apparent willingness to sweep aside valuable
local expertise and relationships built by the existing team for
expatriate contractors reveals a lack of understanding regarding the
local environment in which Roxgold operates.
The Right Strategy by the Right People
To tackle the real needs of Roxgold and to benefit all shareholders, we have developed a clear four-point strategy to make this Company successful.
1. Strengthen the Board: We will ensure continuity by including the
continued stability of one incumbent director to bridge what Roxgold has
achieved with what Roxgold can achieve. As well, we are adding more
technical, developmental and financial expertise and experience to the
board. These are the right people for your Company:
-- Peter R. Jones possesses unparalleled skills and is a recognized
advocate for corporate governance.
-- Brett Richards will lead our team as the Company's new CEO.
-- John Knowles, a chartered accountant, brings over 25 years of mining
finance experience with resource companies within the mid-cap base and
precious metals mining sectors.
-- Gordon Pridham has amassed more than 30 years of executive experience in
company management, capital markets, banking, investment banking and
corporate advisory services.
-- Richard J. Mazur, current director of Roxgold, provides technical
insight and continuity and has held positions in the international
exploration and mining industry for over 30 years as a project geologist
and senior executive.
2. Build Management Capacity: Mr. Richards combines mine and company
building experience with significant first-hand knowledge of, and
relationships in, Burkina Faso and West Africa. Mr. Richards has visited
each and every mine in Burkina Faso and understands what it takes to
succeed in the Country.
3. Communicate a Plan: The new team's vision is to continue to advance the
Company's gold exploration properties in highly prospective Burkina Faso
in an effort to make Roxgold a world-class gold exploration company. The
steps in this plan include: instituting immediate technical overviews;
reviewing the current organizational structure (for future needs);
engaging stakeholders; and launching a medium-term action plan.
4. Enhance the Governance Environment: Our team has already started to
establish a more robust corporate governance environment by developing a
platform of best practices.
Setting the Record Straight
The dissident's circular contains inaccurate and incorrect statements. We believe that it is important that shareholders have all of the facts to make an informed decision.
-- Our New Management Team: The current board, including through the
efforts of the special committee, searched for a CEO replacement for
several months and considered many candidates. After careful
consideration, it became clear that no individual would be able to offer
the expertise, experience, and skill set of Mr. Richards.
-- Option Grants: All current directors of the Company voluntarily agreed
to cancel all of the 5.075 million stock options granted to them in the
past year.
Shareholder concerns have been directly addressed, yet Mr. Lennox-King is still dissatisfied. He has rejected overtures for a compromise solution and has shown his only version of compromise is where he has total control.
Vote for Focused Value Creation
Your vote is critical, no matter how many shares you own. We urge you to vote your GOLD proxy today in favour of continuity, focus and experience.
The deadline for receipt of proxies is 2:00 p.m. (Vancouver time) on Friday, September 21, 2012. To support the new Roxgold team, vote only using the GOLD proxy and discard any Blue proxies that you receive. You may vote by telephone or Internet, or by signing, dating and returning the enclosed GOLD proxy in the postage-paid envelope provided. If you have any questions and/or need assistance in voting your shares, please call Laurel Hill Advisory Group at 1-877-304-0211 (toll-free) or 1-416-304-0211 (collect) or e-mail at assistance@laurelhill.com.
We thank you, the shareholders of this Company, for your support; we appreciate your patience, share your vision for Roxgold, and look forward to a winning future together.
Sincerely,
"Brett Richards" "Peter R. Jones"
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Brett Richards Peter R. Jones
Director Nominee and Proposed CEO Director Nominee and Proposed Chairman
This news release may contain forward-looking statements. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "anticipates", "believes", "could", "estimates", "expects", "may", "shall", "will", or "would". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to such future events and conditions could differ materially from those currently anticipated in such statements for many reasons such as: changes in management, changes in general economic conditions and conditions in the financial markets; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
Contacts:
Roxgold Inc.
Mark McCartney
Corporate Communications
604-682-7305 ext. 228
mark@roxgold.com
www.roxgold.com
