Concerned Shareholders of Guyana Goldfields Launch Website; Set the Record Straight on Current Board's Misleading Statements
TORONTO, Jan. 29, 2019 /CNW/ - Guyana Goldfields Inc. (TSX: GUY) ("Guyana Goldfields" or the "Company") shareholders (the "Concerned Shareholders"), together owning not less than 5% of the issued and outstanding shares of the Company, announce the launch of a new website, FixGUYGold.com, to keep shareholders informed about their plan to rectify performance issues at the Company, lead a share price recovery and seek a value-maximizing transaction.
The Concerned Shareholders, including Northfield Capital Corporation, Robert Cudney, Donald Ross, Gretchen Ross and Patrick Sheridan, have nominated six experienced and qualified nominees to replace all of the Company's board of directors (the "Board"). Guyana Goldfields has lost over CDN$1 billion in value since 2016 because of the incumbent Board's operational failures, irresponsible actions and questionable decisions.
"This website gives shareholders an opportunity to stay up-to-date with our campaign for change to rebuild shareholder value as well as an opportunity to share their frustrations about, and ideas for rebuilding, the Company," said Patrick Sheridan, one of the largest shareholders and founder, former Executive Chairman and former director of the Company. "We have been overwhelmed by the expressions of support we've received to date to replace the entire board of Guyana Goldfields. Shareholder after shareholder, we keep hearing the same message: 'this Board is incapable of halting value-destruction and needs to be replaced on an urgent basis.'"
FixGUYGold.com includes information about the relevant skillset and experience of the Concerned Shareholders' nominees and outlines the reasons for the wholesale change at the Company. Shareholders are encouraged to visit the website for regular updates.
Fact Checking the Current Board's Statements
As the Concerned Shareholders warned in their initial press release on January 2, 2019, the Board is spinning the focus of the campaign for change into an aggressive smear campaign against one of the Concerned Shareholders, Mr. Sheridan, with the objective of distracting shareholders from the core issue: continued value-destruction. By way of example, in Guyana Goldfields' press release dated January 22, 2019, the Company used Mr. Sheridan's name an alarming 27 times while failing to mention either "plan" or "value" even once. The Board continues to miss the mark on the fundamental concern of shareholders.
Indeed, the shareholders we've spoken to find this tactic of distraction laughable, especially since Mr. Sheridan is only one of five Concerned Shareholders seeking change and is not seeking a board seat for himself. Nevertheless, it is important to correct misleading statements made by the Company to the market, which we have set out below:
MYTH: "The Company believes these brownfield targets, which Mr. Sheridan shunned, provide the greatest opportunities for near term growth to mineral resources and reserves."
FACT: MR. SHERIDAN INITIATED AND ADVANCED THE BROWNFIELDS STRATEGY
When Mr. Sheridan was Executive Chairman of the Company, he initiated its brownfields strategy and continued to advance it up until the point he was terminated by the Company. In fact, if it were not for Mr. Sheridan's initiative and efforts in advancing the brownfields strategy, Guyana Goldfields would not have any brownfields at all. Mr. Sheridan and his team were responsible for the discovery and delineation of all of the gold deposits at the Aurora mine including the brownfields targets many years before the current management and Board joined the Company. To say Mr. Sheridan "shunned" the brownfields targets is blatantly untrue. Indeed, Mr. Sheridan, over 24 months ago, initiated the detailed geological logging and geological structural work which has led the company to now claim that work as their own.
"Mr. Sheridan and I initiated the current brownfields exploration program over two years ago," said Daniel Noone, former Vice President Exploration for the Company. "Despite limited funding commitments from the current Board, we were able to establish a significantly enhanced understanding of the major geological controls in the more complex satellite deposits. This initiative, although time consuming due to the relogging of tens of thousands of meters of drill core, has formed the foundation for further exploration work on the brownfields targets."
The facts show that Mr. Sheridan has a long history of creating value for shareholders whereas the current management is responsible for over one billion in losses.
MYTH: "…the Board has instituted a series of fundamental operational and governance improvements at the Company since his termination."
FACT: MR. SHERIDAN WAS RESPONSIBLE ONLY FOR EXPLORATION AND GOVERNMENT RELATIONS, NOT OPERATIONS OR GOVERNANCE
In the Company's press release dated January 22, 2019, the Company stated that Mr. Sheridan refused to accept any responsibility for Guyana Goldfields' operational and governance challenges. In the same press release, however, the Company admitted that Mr. Sheridan had no responsibility for the operations of the Company, and that operations were controlled and directed solely by President and CEO Scott Caldwell and the technical committee led by Non-Executive Chairman Rene Marion who reported directly to Mr. Caldwell. Neither Mr. Caldwell nor Mr. Marion, who were jointly responsible for operations, seems to be capable of executing even the most basic business plans. The technical committee, despite regular trips to the mine site, did nothing to alert the Board or shareholders as to the continued operational failures. The Concerned Shareholders believe that Mr. Caldwell and Mr. Marion lack adequate engineering skills and have failed to demonstrate that they possess the business acumen and skills necessary for the proper execution of their roles with the Company.
With regard to governance, Mr. Sheridan along with the other Concerned Shareholders agree that a drastic overhaul to the governance of the Company is required. In fact, Mr. Sheridan was raising the alarm on certain sub-standard governance practices and was set to propose changes to correct and enhance such practices to the Board when, instead of listening to Mr. Sheridan and investigating and responding to these serious concerns, the Board preemptively terminated him. This is why the Concerned Shareholders are also seeking to establish an ethics committee to ensure the ethical conduct of the Company's business.
MYTH: "Suresh Kalathil's appointment is the fourth senior hire the Company has made as it takes steps to professionalize all aspects of its business following the termination of the former Executive Chairman."
FACT: HIRING FRIENDS AND INSIDERS
The Concerned Shareholders acknowledge that Mr. Kalathil is a qualified and well-respected professional. In fact, Mr. Sheridan had encouraged and supported the hiring of Mr. Kalathil while Mr. Sheridan was serving as Executive Chairman of the Company. As such, the Concerned Shareholders welcome the hiring of Mr. Kalathil as the Company's new Senior Vice President and Chief Operating Officer.
While it is true Guyana Goldfields has recently hired three other new senior employees in addition to Mr. Kalathil, two of such recent hires are known to be close friends of Mr. Caldwell, the Company's current President and CEO, which raises questions as to the motivation behind their appointments. The Concerned Shareholders are concerned that Mr. Caldwell and his friends may have received compensation packages that are substantially more lucrative than the Company's past practices, and which are inconsistent with the reasonable expectations of shareholders.
The Concerned Shareholders continue to be disappointed by the fact that, despite the current Board's claim that it is open to engagement and open to Board refreshment, four weeks have passed since the Concerned Shareholders announced its six highly qualified nominees and yet the Board has not made any attempt to contact or consider them.
Patrick Sheridan, on behalf of the Concerned Shareholders, welcomes the opportunity to engage with fellow shareholders. Mr. Sheridan can be reached at 416-628-5904 or jpsminefinder@gmail.com.
Advisors
Kingsdale Advisors is acting as strategic shareholder, communications and proxy advisor and Norton Rose Fulbright Canada LLP and Lenczner Slaght Royce Smith Griffin LLP are acting as legal advisors to the Concerned Shareholders of Guyana Goldfields Inc.
Additional Information
Information in Support of Public Broadcast Solicitation
The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although the Concerned Shareholders have delivered the requisition, shareholders are not being asked at this time to execute a proxy in favour of the Concerned Shareholders' nominees (the "Nominees") or any other resolution set forth in the requisition. In connection with the meeting, the Concerned Shareholders may file a dissident information circular in due course in compliance with applicable securities laws.
Notwithstanding the foregoing, the Concerned Shareholders are voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102") and section 150(1.2) of the Canada Business Corporations Act in accordance with Canadian corporate and securities laws applicable to public broadcast solicitations. In connection therewith, certain information regarding, among other things, the Nominees has been provided by the Concerned Shareholders in its press release dated January 10, 2019, (the "Nominee Announcement") under the section entitled "Information Concerning the Nominees". The Nominee Announcement has been filed by the Concerned Shareholders and is available for review on the Company's SEDAR profile at www.sedar.com. Since the Nominee Announcement, Nominee James White has advised the Concerned Shareholders that he now beneficially owns, controls or directs (directly or indirectly) 35,000 common shares of Guyana Goldfields.
The information contained herein and any solicitation made by the Concerned Shareholders in advance of the meeting is, or will be, as applicable, made by the Concerned Shareholders and not by or on behalf of the management of Guyana Goldfields. All costs incurred for any solicitation will be borne by the Concerned Shareholders, provided that, subject to applicable law, the Concerned Shareholders may seek reimbursement from Guyana Goldfields of the Concerned Shareholders' out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of Guyana Goldfields' board.
The Concerned Shareholders are not soliciting proxies in connection with the meeting at this time. The Concerned Shareholders may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholders. The Concerned Shareholders have retained Kingsdale Advisors ("Kingsdale") as its strategic shareholder, communications and proxy advisor. Kingsdale's responsibilities will principally include soliciting shareholders should the Concerned Shareholders commence a formal solicitation of proxies, providing strategic advice and advising the Concerned Shareholders with respect to the meeting and proxy protocol. Any proxies solicited by or on behalf of the Concerned Shareholders, including by Kingsdale or any other agent, may be solicited pursuant to a dissident information circular or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian corporate and securities laws. Any such proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law.
The registered address of Guyana Goldfields is located at 141 Adelaide Street West, Suite 1608, Toronto, Ontario, M5H 3L5. A copy of this press release may be obtained on the Company's SEDAR profile at www.sedar.com.
SOURCE Concerned Shareholders of Guyana Goldfields Inc.
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