- Current Chairman and majority of the Board not acting in
shareholder's best interest.
- Concerned Shareholder proposes a new Board that possesses a
collection of diverse experience with the relevant skills to place
Colorado on a path to
succeed.
PEACHLAND, BC, March 14, 2018 /CNW/ - Adam Travis (the
"Concerned Shareholder"), a director, shareholder and former
President and Chief Executive Officer of Colorado Resources Ltd.
(TSXV:CXO) ("Colorado" or
the "Corporation") today announced that he has mailed a
proxy circular and letter to shareholders of Colorado ("Shareholders") in advance
the Corporation's annual general meeting of Shareholders currently
scheduled to occur on April 17, 2018
(the "Meeting"). Shareholders are urged to vote the YELLOW
proxy.
The Concerned Shareholder previously announced five highly
experienced director candidates that he intends to propose for
election to the board of directors of Colorado at the Meeting. These proposed
nominees consist of Adam Travis,
Patrick Soares, Bryan Wilson, Christian
Kargl-Simard and Michael
Cathro (the "Proposed Nominees").
The Concerned Shareholder is confident that the shareholder
mindset of the Proposed Nominees, combined with their technical
expertise and experience as it relates to the Corporation's
existing assets, is a formula for value creation. This also
uniquely positions the Proposed Nominees to unlock the long-term
value and opportunities that the Corporation's current assets
contain. Shareholders are encouraged to read the letter to
Shareholders and the Circular filed on SEDAR under Colorado's profile, or visit the Concerned
Shareholders' website at
www.laurelhill.ca/a-better-coloradoresources.com.
A full copy of the letter to Shareholders is set out below:
Important Message to Shareholders of
Colorado Resources Ltd.
Your Vote Will Determine the Future of Your
Investment
March 12, 2018
The Chairman of the
Board, Lawrence Nagy,
along with Terese Gieselman and William Lindqvist,
have breached their fiduciary duties of loyalty and care
which are owed by each director and officer to the Corporation
and its shareholders under corporate law.
Such behavior CANNOT continue and CANNOT remain hidden.
|
Dear Fellow Colorado Shareholders,
Shareholders have not been told the full story and as
you read further, you will find that in order for Colorado
Resources Ltd. ("Colorado"
or the "Corporation") to succeed, change is required.
I, Adam Travis, a co-founder,
current director and former President and Chief Executive Officer
of Colorado, have a passion for
the Corporation to succeed, work in the best interests of
Shareholders and deliver results. Like you, I am also a
shareholder. Along with my family, we hold approximately 6,000,000
shares of Colorado. My interests are aligned with yours and
I am motivated to maximize value for all.
Unfortunately, the self interested and oppressive actions of
the majority of the board, have given me no other option but to
stand up for the rights of shareholders and propose a new board of
directors (the "Shareholder Nominees") for election at
the April 17, 2018
annual general meeting of shareholders of Colorado (the "Meeting"). I care deeply
about seeing Colorado transitioned
back into a functioning and transparent company with a board of
directors that will act in the best interests of shareholders. You
now have a choice and the opportunity to determine the next path
forward for your investment in Colorado.
Once you read and understand the full facts, I believe you
will agree that the Shareholder Nominees are the right candidates
to move Colorado forward without
conflicting agendas.
Background and Reasons: Questionable and Damaging
Behaviour of Conflicted Directors
Disclosure has been limited and I have fought behind the
scenes for transparency and good corporate governance of
Colorado. I stood up against self
interested actions taken by the Chairman of the Board, Lawrence Nagy, and two interconnected directors,
Terese Gieselman and William Lindqvist (the "Conflicted
Directors"). This ultimately led to my termination without
cause, as your President and CEO.
Colorado has built up an
enviable portfolio of exploration projects and recently brought in
a strategic partner. However, all of this is being threatened by
the actions of the Conflicted Directors. It is important that
shareholders are aware of the following concerns before you cast
your vote:
The Conflicted Directors' Damara
Transaction
The Damara Transaction (see below) raised strong concerns
from shareholders and was later questioned by the TSX
Venture Exchange, followed by subsequent concerns from the British
Columbia Securities Commission surrounding conflicts of
interests, after which the Damara Transaction was
terminated.
Background
The Conflicted
Directors
|
Colorado
|
Damara
|
Position
|
Number of
Shares1
|
Position
|
Number of
Shares1
|
Lawrence
Nagy
|
Chairman of the
Board
|
161,000
|
CEO and
Director
|
959,806
|
Terese
Gieselman
|
CFO, Secretary and
Director
|
289,990
|
CFO and
Secretary
|
897,052
|
William
Lindqvist
|
Director
|
0
|
Director
|
783,054
|
1Beneficial ownership of, or
control or direction over, whether direct or indirect, of common
shares of Colorado or Damara, as applicable, noted in the table
above, is based on information filed on sedi.ca as of March 12,
2018 under their respective insider profiles. Mr. Lindqvist's
SEDI profile appears to erroneously indicate he ceased to be an
insider of Damara in 2009, however his most recent filings for
Damara were as of March 2, 2016.
|
Χ
|
In March 2017,
Colorado's board of directors requested that I and the remaining
independent director on the board, act on Colorado's behalf
regarding a possible transaction (the "Damara Transaction")
to option the Corporation's Kinaskan-Castle property ("K-C
Property") to Damara Gold Corp. ("Damara"). At that
time, Messrs Nagy and Lindqvist and Ms Gieselman (the
"Conflicted Directors") correctly determined that none of
them should negotiate the terms of the potential transaction on
behalf of Colorado because each of them were and still are, a
director and/or officer of Damara. It was later advised in late May
that Damara was unable to enter into an agreement at that time for
various reasons, including that Damara did not have sufficient cash
on hand to pay Colorado.
|
|
|
Χ
|
In late July,
there was sudden urgency with the Conflicted Directors to revisit
and push through the Damara Transaction when GT Gold Corp., an
owner of a mineral property adjacent to Colorado's K-C Property,
publicly announced positive drilling results that increased GT Gold
Corp.'s stock price significantly. Although this news attracted
much interest in Colorado's K-C Property over the following months
from several third parties, the Conflicted Directors actively
advocated for Colorado to only pursue the Damara
Transaction.
|
|
|
Χ
|
I, along with the
remaining independent director, expressed to the board that this
was not the right time to sell our interest in the K-C Property
with a big discovery next door. However, if we were to sell, I
voiced the fact that there had to be a bid process to maximize the
value for Colorado and its shareholders. Against my and the
other independent director's concerns, the Conflicted Directors
pushed through the Damara Transaction with a questionable Board
vote when they realized the Damara Transaction would not go
through. Instead of recusing themselves from voting due to a
conflict of interest, the 3 Conflicted Directors voted to approve
the transaction. I voted against and the remaining independent
director abstained from voting to register his displeasure with
this flawed process.
|
|
|
Χ
|
On November 20,
2017, Colorado and Damara announced a transaction whereby Damara
would acquire a 100% interest in Colorado's K-C Project
- a transaction that was more advantageous to
Damara. This joint news release was signed by Lawrence Nagy who
is Chairman of the Board of Colorado and also the President and CEO
of Damara.
|
|
|
Χ
|
On December 15,
2017, after many concerns were raised by shareholders and
regulators and on the advice of the Corporation's special legal
counsel, the Damara Transaction was terminated.
|
Termination of CEO Who Stood Up for the Rights of
Shareholders
Χ
|
I have tried on
multiple occasions to work out any differences with the Conflicted
Directors, including a proposal that Colorado retain an
independent consultant to identify and address Colorado's corporate
governance issues.
|
|
|
Χ
|
Instead of
accepting their accountability and addressing my concerns regarding
significant conflicts of interest and questionable corporate
governance practices, the Conflicted Directors instead retaliated
against me. Eventually, after months of hand cuffing me in my role
as CEO, the Conflicted Directors instigated my termination as
President and CEO of Colorado without cause.
|
Corporate Governance Concerns
Χ
|
Conflicted
Directors breached the British Columbia Business Corporations
Act.
|
|
|
Χ
|
Conflicted
Directors rejected my attempts to complete a proper sales process
of the K-C Property and blocked me from signing confidentiality
agreements regarding the K-C Property with interested
parties.
|
|
|
Χ
|
Conflicted
Directors opposed my request to make the Damara Transaction
conditional on approval of Colorado's shareholders and obtain
pre-clearance from regulators.
|
|
|
Χ
|
Conflicted
Directors delayed the issuance of a news release on the K-C
Property for over 2 months in order to minimize shareholders'
access to information. It was eventually issued when the Damara
Transaction was announced.
|
Impeding the Rights of Shareholders to a Fair and
Transparent Process
Χ
|
Conflicted
Directors purposely delayed the announcement of the Meeting to
impede timely director nominations under the Corporation's advance
notice policy for the election of directors (the "Advance Notice
Policy").
|
|
|
Χ
|
The advance notice
submission for the proposed Shareholder Nominees (the "Nominating
Shareholder Notice") was rejected without providing the reasons,
impeding the fundamental right of shareholders to nominate
directors to the board. It was not until legal action
was taken and a court petition was filed regarding such oppressive
action, did Counsel to the Corporation agree to accept the
Nominating Shareholder Notice submitted by me under the Advance
Notice Policy.
|
|
|
Χ
|
A special
committee of the Conflicted Directors has been formed to
make decisions on all matters related to the contested Meeting. The
special committee's mandate is to act independently and in the best
interests of shareholders, among other responsibilities.
Unfortunately, the two person committee includes Messrs Nagy and
Lindqvist - Two of the Conflicted Directors.
It is questionable if they will be able to act in the best
interests of shareholders, as it is clear that they are
conflicted.
|
Colorado's shareholders have
a reasonable expectation that its directors will conduct the
corporate governance of Colorado
in a fair and transparent manner. By wrongfully voting in favour of
the Damara Transaction, the Conflicted Directors have put their own
self-interests ahead of Colorado's. Further, by not accepting the
Nominating Shareholder Notice until legal action was taken, the
Conflicted Directors have attempted to undermine shareholder
democracy.
An Ethical and Experienced Board Who Will Act In the Best
Interests of Shareholders
With the following five (5) Shareholder Nominees, I hope to
usher in renewal and change for the better. The Shareholder
Nominees possess a collection of diverse experience with the
relevant skills to place Colorado
on a path to succeed. Importantly, the Shareholder Nominees have
demonstrated a commitment to focusing on the best interests of
shareholders across multiple organizations. They also have the
shareholder mindset necessary to ensure that shareholder value is
maximized.
Highlights of the highly skilled and experienced
Shareholder Nominees:
√
|
Adam
Travis. I have been involved in the exploration sector
for over 28 years. I served as President and CEO of Colorado
Resources Ltd. from 2009 to 2018 and am currently a director of the
Corporation.
|
|
|
√
|
Patrick
Soares. Mr. Soares is the President, CEO and a director
of Foran Mining Corporation. During his tenure as President and CEO
of Brett Resources Inc., he oversaw the increase to its market
capitalization of $60 million to $370 million prior to its sale to
Osisko Mining Corp.
|
|
|
√
|
Bryan
Wilson. Mr. Wilson has worked in the mining industry for
over 30 years in geological and financial analyst positions. He is
currently the Director of Exploration and Business Development of
Centerra Gold Inc.
|
|
|
√
|
Christian
Kargl-Simard. Mr. Kargl-Simard is a professional
engineer with over 14 years of experience in the mining industry,
having worked both in technical and finance roles. He is currently
the President, Chief Executive Officer and a director of Adventus
Zinc Corporation.
|
|
|
√
|
Michael
Cathro. Mr. Cathro is a registered professional
geoscientist. His career includes 17 years in technical and
management roles with the BC Ministry of Energy, Mines and
Petroleum Resources as well as acting as the former Vice-President
of Operations for Skeena Resources Ltd.
|
Detailed backgrounds for each Shareholder Nominee can be
found in the accompanying Concerned Shareholder's Circular.
The Shareholder Nominees represent:
√
|
A slate of
directors with diverse and relevant skills and experience, who have
a history of value creation and a commitment to focusing on the
best interests of shareholders across multiple
organizations.
|
|
|
√
|
A highly
experienced slate of directors who are focused on good governance,
transparency and providing management with expert
oversight.
|
|
|
√
|
A group that has a
strong alignment with Colorado's shareholders. The Shareholder
Nominees, along with my family, hold a significant number of shares
of the Corporation (collectively holding approximately 5.2% of the
issued and outstanding common shares), meaning our interests are
aligned with yours.
|
The Path Forward
Many of you have noted that Colorado has some of the best and largest
landholdings in the Golden Triangle of NW
British Columbia, in addition to having some of the best
exploration teams in the Province. You have also lamented the fact
that Colorado's share price should
be higher and I have shared your concerns and frustrations.
Key Highlights
√
|
Last summer
I was able to orchestrate buying Seabridge Gold Inc. out of
their remaining interest in our KSP Project for $1.5 million worth
of cash and shares and turning that into a $7.3 million financing
led by Goldcorp Inc. ("Goldcorp"). This should have
been a momentous milestone for Colorado along with share
appreciation. Unfortunately, given the fact that the Conflicted
Directors were working behind the scenes to strip a valuable asset
out of Colorado, you as a shareholder were deprived.
|
|
|
√
|
I was also working
on a number of joint venture opportunities for our non-core
projects. Additionally, I was working with Goldcorp's technical
team to prioritize and advance our main assets this upcoming field
season. I hope to have the opportunity to continue with these
positive initiatives.
|
Even after all the conflicts mentioned above, I still
believe that we can take this opportunity to make Colorado all it can be. I am truly humbled to
have such highly skilled and respected individuals in the industry
join me on the proposed new board slate and the countless
shareholders who support me in this effort to help take back your
company.
Please allow me the opportunity along with a committed and
experienced board to re-build the Colorado team that respects and acts in the
best interests of its shareholders.
Vote Your Shares
Today
You may soon read many false attacks leveled against me to
deflect from the real issues that remain at the board level. I hope
that as you read this letter and the accompanying circular, you
will be able to navigate through these attacks and see the truth
that I have and will continue to work for
you.
I have had the pleasure of speaking with many of you or
meeting you at conferences and trade shows. Your support over the
years has been greatly appreciated, especially during the
challenging times these last 6 years and I welcome you to continue
to reach me if you have any questions or concerns. I would be
pleased to hear from you and may be contacted by phone or email as
provided below.
Vote the YELLOW voting form for a positive future that
keeps you and your Corporation in mind. You deserve better and no
longer should you come last. Vote for the committed Shareholder
Nominees and ensure that your investment is protected.
Sincerely Yours,
(signed) "Adam Travis"
Telephone: 1-250-878-7554
Email:
adamroberttravis@gmail.com
Shareholder Questions
VOTE YOUR YELLOW PROXY PRIOR TO 8:00
A.M. (PACIFIC TIME) ON FRIDAY, APRIL 13, 2018.
Shareholders are urged to vote online by following the instructions
found on the YELLOW proxy or YELLOW voting instruction form to
ensure votes are received in a timely manner.
Shareholders who have questions or require assistance with
voting may contact the Concerned Shareholder's Proxy Solicitation
Agent at:
Laurel Hill Advisory Group
Toll free in North America : 1-877-452-7184
Outside North America:
1-416-304-0211 (Collect)
Email: assistance@laurelhill.com
Forward-looking statements
Except for the
historical information contained herein, the matters addressed in
these materials are forward-looking statements that involve certain
risks and uncertainties. You should be aware that actual results
could differ materially from those contained in the forward-looking
statements. The Concerned Shareholder does not assume any
obligation to update the forward-looking information.
SOURCE Adam Travis