- Mr. Cooke sold Canagold shares ahead of a major private
placement opportunity in 2020, then purchased shares shortly after
at a deeply discounted price in a manner that raises many
questions
- A full explanation is required
- Shareholders can hold Mr. Cooke accountable by voting FOR Sun
Valley’s highly qualified, independent and diverse nominees
- Vote only the BLUE proxy FOR Sun Valley’s
nominees by 5:00 p.m. on Thursday, July 14, 2022. 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” or the “Company”), has uncovered that Mr.
Bradford Cooke had previously sold Canagold shares ahead of a major
private placement opportunity, then purchased shares shortly after
at a deeply discounted price. Mr. Cooke’s public filings regarding
these purchases, some of which were not filed, or not accurately
filed, until well after the time periods required under securities
laws, raise serious questions. Sun Valley believes Mr. Cooke and
Canagold are obligated to fully disclose Mr. Cooke’s trades and to
be transparent with shareholders. Sun Valley believes that this is
but one more example of why shareholders need to stop the value
destruction and poor corporate governance at Canagold by Mr. Cooke
and the currently entrenched board of directors (the
“Board”).
On behalf of all shareholders, Sun Valley is demanding that
Canagold and Mr. Cooke provide a full explanation for the numerous
issues related to Mr. Cooke’s trading activity and disclosures.
Instead of trying to blame the Company’s consultants, Canagold and
Mr. Cooke need to take responsibility.
“Canagold is attempting to distract shareholders from Mr.
Cooke’s history of value destruction and disregard for proper
governance by attacking me personally,” said Vikram Sodhi, Managing
Director and Co-Founder of Sun Valley. “Attacking your largest
shareholder for identifying areas of operational and governance
improvements, and for offering to provide the Company with badly
needed financing at a premium to market, will not do anything to
turn the Company around. Rather than engaging in personal attacks
and scare tactics, the Board’s time would be better spent looking
into Mr. Cooke’s activities and filings and providing shareholders
with transparency.”
MR. Cooke’s Trading LEADING UP TO A
Private Placement Announcement in 2020, AND PURCHASES OF DISCOUNTED
SHARES
Date
Event*
Price
Proceeds/Cost
Mr. Cooke’s trading of his
Canagold shares is dormant for 18 months.
Jan-Dec 2019
No transactions
Jan-Jun 2020
No transactions
Mr. Cooke begins selling his
Canagold shares just 42 days before dilutive private placement is
announced.
July 8, 2020
SELL – 300,000 shares in the
market
$0.14
$42,000
Mr. Cooke continues to sell in
the midst of preparation of Canagold’s financial statements.
Aug 10, 2020
SELL – 150,000 shares in the
market
$0.11
$16,500
Aug 14, 2020
Canagold financial statements
released
Aug 19, 2020
SELL – 200,000 shares in the
market
$0.11
$22,000
No mention of Mr. Cooke’s
liquidation of his Canagold shares.
Aug 19, 2020
Canagold announcement of
consolidation, name change and dilutive private placement
Mr. Cooke’s ongoing liquidation
of his Canagold shares.
Aug 20, 2020
SELL – 50,000 shares in the
market
$0.13
$6,500
Sep 10, 2020
SELL – 200,000 shares in the
market
$0.1375
$27,500
Sep 14, 2020
SELL – 400,000 shares in the
market
$0.155
$62,000
Sep 15, 2020
SELL – 300,000 shares in the
market
$0.17
$51,000
Sep 16, 2020
SELL – 111,000 shares in the
market
$0.18
$19,980
Mr. Cooke purchases shares on the
dates of the closings of the private placements at a deeply
discounted price.
Oct 7, 2020
(amended over two months later
on December 17, 2020)
BUY – 5,000,000 shares and
750,000 warrants “under a purchase/ownership plan”
(originally filed as the purchase of 1,500,000 units under the
private placement)
$0.08
$400,000
Nov 16, 2020
(filed 18 months late on June
14, 2022)
BUY – 7,500,000 shares
“under a purchase/ownership plan”
$0.08
$600,000
*Trading information obtained from SEDI
and Canagold press releases. Trades reported to occur on the same
date are shown combined. Sun Valley cannot confirm the accuracy of
SEDI filings and believes they are on a pre-consolidation basis to
Canagold’s current outstanding shares.
During his selling spree, Mr. Cooke was able to liquidate
1,710,000 shares and reduce his cost base by approximately $123,000
at prices from $0.11 to $0.18 per share, which would be quickly
refilled at $0.08 per share or up to 55% less than where he
sold.
The Company should have disclosed Mr. Cooke’s liquidation of
shares on multiple occasions, including:
- First, on August 19, 2020, when Canagold announced the dilutive
private placement.
- Then again on September 3, 2020, when a second tranche of the
private placement was announced.
In both cases, Canagold and Mr. Cooke failed to provide adequate
disclosure.
- The first indication that there would be insider participation
in the financing was buried in an information circular filed
September 22, 2020 with no press release. There was also no mention
of any insider participation in Canagold’s press release on October
8, 2020, which announced that the first tranche of the financing
had closed.
- Mr. Cooke’s first failed attempt at reporting his October 7,
2020 purchases on SEDI only showed 1,500,000 units being purchased;
presumably from the private placement that closed on October 7,
2020. However, a revised SEDI filing submitted over two months late
– and after the closing of the second tranche – reveals Mr. Cooke
actually purchased 5,000,000 shares and 750,000 warrants on October
7, 2020. The shares were stated to be acquired pursuant to a
purchase/ownership plan, which is usually used to refer to a
company’s equity-based plan.
- A MAJOR mystery is a purchase of a further 7,500,000
shares on November 16, 2020, which was disclosed over 1.5 years
late on June 14, 2022 and, coincidentally, the day before Canagold
formally initiated a proxy fight against its own arm’s length
shareholders. Accurate disclosure and SEDI filings are not an
optional requirement to be carried out when insiders get around to
it. Once again, the securities were stated to be acquired pursuant
to a “purchase/ownership plan”.
It would appear that Mr. Cooke spent $1 million acquiring
securities most of which were stated to not be acquired under the
dilutive private placement, and yet the purchases were
coincidentally made on the same dates and at the same purchase
price as under the private placement – a price well below the then
market price.
Sun Valley is demanding a clear answer from Canagold and Mr.
Cooke regarding these transactions for the benefit of all
shareholders. At the very least, we need answers to the following
questions:
- On August 10, 2020 – 4 days before the release of Q2 financial
statements – Mr. Cooke sold shares. The Toronto Stock Exchange
encourages listed companies to impose trading blackouts prohibiting
trading by insiders for a certain number of days before the release
of financial statements. Did Mr. Cooke trade in violation of a
blackout?
- Mr. Cooke spent $1 million to acquire securities (most if not
all of which were reportedly not acquired under a private
placement) privately. How was he able to do this? Who sold these
shares to Mr. Cooke? Did Canagold help finance these purchases
under an undisclosed “purchase/ownership plan”?
- Why was a SEDI filing made on June 14, 2022, days before an
unnecessary proxy fight, for a transaction that supposedly closed
on November 16, 2020?
MASSIVE INCONSISTENCIES IN MR. COOKE’S
OWNERSHIP REPORTING, LATE FILINGS AND CANAGOLD’S ASSOCIATED
DISCLOSURE REMAINS UNEXPLAINED
In two of Canagold’s 2021 publicly filed and signed disclosure
documents (Canagold’s 20-F filed on April 29, 2021 and Canagold’s
Management Information Circular filed on May 12, 2021), Mr. Cooke’s
shareholdings were listed at 5,259,916 shares.
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 (Canagold’s 20-F filed
on May 5, 2022) and dropped again to 2,921,984 shares (Canagold’s
Management Information Circular dated June 13, 2022).
However, Mr. Cooke is claiming he has not sold any shares during
that period and, in an attempt to distract shareholders from
numerous misleading disclosures, suggested this error was simply a
result of his delinquent filings on SEDI and that his SEDI agent
was to blame.
MR. COOKE’S MOST RECENT
TRADING
As previously noted, Mr. Cooke refuses to acknowledge or explain
the appropriateness of his share purchase on June 16, 2022, AFTER
receiving Sun Valley’s premium financing offer but BEFORE it was
publicly disclosed to the market.
Shareholders are right to question if this was an intentional
act of omission or if this was another example of Mr. Cooke’s
inability to follow proper governance practices. Regardless, it is
a clear sign that change is urgently needed.
Sun Valley Can Help Restore Value,
Integrity and Governance at Canagold
Sun Valley’s strategic plan to put Canagold on the right track
can be found on SEDAR and on www.TheNewCanagold.com. The plan
details the case for change at the Canagold Board and lays out Sun
Valley’s strategic steps to advance Canagold’s long-stalled
flagship project, New Polaris, and to strengthen Canagold's
governance for the benefit to all shareholders. Our exceptionally
qualified nominees have the necessary skills and experience to
effect positive changes at Canagold.
VOTE THE BLUE PROXY
Sun Valley has the right plan and the resources to turn Canagold
around. Shareholders are encouraged to vote only 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. McMillan LLP, 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 objectives, 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 of Sun Valley and its advisors.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220705005583/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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