- Canagold lays out an absurd smokescreen of commentary in an
attempt to cover-up on-going value destruction and failures by the
board of directors
- Canagold contradicts their previous compensation disclosure and
seeks to reload the option plan with an excessive and unwarranted
20% of the company’s stock
- Mr. Bradford Cooke has not properly explained errors in
Canagold’s public disclosure of his share ownership and shamelessly
blames SEDI filing agent for his reporting failures – refusing to
take responsibility
- Canagold makes precarious financial position worse by starting
an expensive proxy fight instead of spending money on the property;
Risks CRA review
- Vote only the BLUE proxy FOR Sun Valley’s
nominees by 5:00 p.m. on Thursday, July 14, 2002. To vote, contact
Kingsdale Advisors at 1-888-213-0093 or at
contactus@kingsdaleadvisors.com.
Sunvalley Company DMCC (“Sun Valley”), a strategic and
long-term focused investor of Canagold Resources Ltd (TSX: CCM)
(“Canagold”), reminds shareholders of the critical
importance of voting the BLUE proxy FOR Sun Valley’s nominees at
Canagold’s upcoming annual and special meeting on Tuesday, July 19,
2022 (the “Meeting”) amidst a series of misleading
disclosures issued by Canagold.
Misleading commentary
on executive compensation and plan to approve an Excessive option
plan
In what appears to be an effort to trick shareholders, Canagold
is contradicting its previously filed disclosure on executive
compensation prescribed by securities rules and is disclosing only
the cash salary portion of executive compensation, basically saying
that generous bonuses and option grants are not relevant. Perhaps
Canagold is excluding the value of the options as an admission of
their inability to deliver shareholder returns. Don’t be fooled. In
total, the 2021 compensation package for Canagold’s five executives
was over $1.7 million. Directors have also shared in this
compensation bonanza with Bradford Cooke’s director fees in 2021
increasing 685%.
To make matters worse, despite the lack of progress on key
projects, shareholders are being asked to approve an updated stock
option plan to increase the maximum number of common shares
available for issuance under the plan from 8,852,339 common shares
to 17,311,919, representing 20% of the I/O as of June 6, 2022. The
revised stock option plan contains many problematic features that
benefit the executives and the board of directors at the expense of
shareholders. Two of the provisions – namely allowing for
discretionary, non-employee director participation and a provision
that allows the board of directors to amend the plan without
shareholder approval – should warrant automatic opposition by
shareholders, according to Institutional Shareholder Services, Inc.
(“ISS”), a leading and independent third-party proxy
advisor.
In other misleading disclosure related to compensation, Bradford
Cooke has denied excessive share option grants over the years with
his current holdings of 1,050,000 options. Despite the deficiencies
in Mr. Cooke’s System for Electronic Disclosure by Insiders
(“SEDI”) filings, for which he has taken no accountability and
opted to blame a SEDI filing agent for, it is clear he has been
granted MILLIONS of options during his unsuccessful reign at
Canagold and its predecessors.
Sun Valley and its director nominees will ensure that governance
and pay-for-performance is restored.
Mr. Bradford Cooke’s
ownership reporting irregularities and Canagold’s associated
misleading disclosure
In two of Canagold’s 2021 publicly filed and signed disclosure
documents Mr. Cooke’s shareholdings were listed at 5,259,916 shares
according to Canagold’s 20-F filed April 29, 2021 and Canagold’s
Management Information Circular filed May 12, 2021.
In Canagold’s 2022 publicly filed and signed disclosure
documents, Mr. Cooke’s shareholdings showed a significant 44%
decline and were listed at 2,932,195 shares according to Canagold’s
20-F filed April 29, 2021 and dropped again to 2,921,984 shares as
disclosed in Canagold’s Management Information Circular June 13,
2022.
However, Mr. Cooke claims he hasn’t sold any shares and, in an
attempt to distract people from a number of misleading disclosures,
suggests this error is a result of late filings on the SEDI and
that his SEDI agent is to blame.
Is it a shareholder’s responsibility to figure out this mess of
disclosure and guess which version to rely on? Mr. Cooke needs to
clarify, which record and documents are correct. Has Mr. Cooke sold
shares? Or does he and Canagold just not care about disclosure?
Mr. Cooke has also refused to acknowledge the appropriateness of
his purchase of shares on June 16, 2022 AFTER receipt of an above
market financing offer which was not disclosed to the market.
Canagold’s Precarious
Financial Position further jeopardized By Canagold’s initIation of
unnecessary proxy fight
Canagold’s cash position as of March 31, 2022 was $822,000 in
tax advantaged flow through funds as the last 2 rounds of financing
were done on a flow through basis under the rules set out by the
Canada Revenue Agency (“CRA”).
Instead of spending flow through funds on exploration expenses
as required by the CRA, the Canagold Board decided to stop the
drilling program during prime drilling season and divert that cash
to commence an unprovoked attack on its own shareholders. The same
shareholders who have offered equity injections at premium
valuations.
Costs will be well over the $250,000 disclosed which is already
almost one-third of Canagold’s cash resources at March 31, 2022. By
waging this proxy fight with flow through money, Canagold risks
review by CRA for non-allowable flow through expenses, not to
mention depriving shareholders of the exploration expenditures they
expect and deserve. What’s worse, shareholders will be paying these
costs, not the board of directors.
This proxy fight has been commenced by Canagold, at the expense
of shareholders, for the sole purpose of entrenching an
underperforming board of directors. However, shareholders have the
ability to stop the destruction of value and board entrenchment by
voting the BLUE proxy FOR Sun Valley's nominees.
Vote the BLUE proxy
Sun Valley’s Team and Nominees have a plan and the resources to
turn Canagold around.
Shareholders are encouraged to vote the BLUE proxy FOR
all three of Sun Valley’s highly-experienced, independent nominees
– Dr. Carmen Letton, Ms. Sofia Bianchi and Mr. Andrew Trow.
Don’t wait, voting is fast and easy. Please vote well in
advance of the proxy voting deadline of Thursday, July 14, 2022 at
5:00 p.m. ET. If you have questions or need help voting, contact
Kingsdale Advisors at 1-888-213-0093 or at
contactus@kingsdaleadvisors.com.
Advisors
Kingsdale Advisors is acting as strategic shareholder and
communications advisor to Sun Valley. Wildeboer Dellelce LLP and
Crawley Mackewn Brush LLP are acting as legal counsel to Sun
Valley.
About Sun Valley
Sun Valley is a private equity firm focussed on the precious
metals industry with portfolio companies and branch offices in the
Americas, Europe and Asia. Sun Valley seeks to invest in
sustainable development projects and operations with growth
potential, low cash costs of production, or the operating
flexibility to insulate against volatility in the commodity
markets.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking information within
the meaning of applicable securities laws. In general,
forward-looking information refers to disclosure about future
conditions, courses of action, and events. All statements contained
in this press release that are not clearly historical in nature or
that necessarily depend on future events are forward-looking, and
the use of any of the words “anticipates”, “believes”, “expects”,
“intends”, “plans”, “will”, “would”, and similar expressions are
intended to identify forward-looking statements. These statements
are based on current expectations of Sun Valley and currently
available information. Forward-looking statements are not
guarantees of future performance, involve certain risks and
uncertainties that are difficult to predict, and are based upon
assumptions as to future events that may not prove to be accurate.
Sun Valley undertakes no obligation to update publicly or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as required by
applicable securities legislation.
Disclaimer
The information contained or referenced herein is for
information purposes only in order to provide the views of Sun
Valley and the matters which Sun Valley believes to be of concern
to shareholders described herein. The information is not tailored
to specific investment objections, the financial situations,
suitability, or particular need of any specific person(s) who may
receive the information, and should not be taken as advice in
considering the merits of any investment decision. The views
expressed herein represent the views and opinions of Sun Valley,
whose opinions may change at any time and which are based on
analyses made by Sun Valley and its advisors.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220628005536/en/
Daniel Henao Partner / VP Business Development Phone: 6042607046
Email: dhenao@sunvalleyinv.com
Kingsdale Advisors: Tom Graham Executive Vice President, Western
Canada Direct: 587-330-1924 Email:
tgraham@kingsdaleadvisors.com
Media: Hyunjoo Kim Vice President, Strategic Communications and
Marketing Direct: 416-867-2357 Email:
hkim@kingsdaleadvisors.com
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