MONTREAL, Oct. 29, 2020 /CNW Telbec/ - Mr. Fahad Al-Tamimi (the "Concerned Shareholder"), a
long standing shareholder holding approximately 9.92% of the issued
and outstanding common shares of Mason Graphite Inc. (TSX.V: LLG)
("Mason" or the "Company"), announces today that, after
consultation with other key shareholders, the time has come for a
new direction and management for Mason. Mason deserves directors
who will actively work to maximize the Company's opportunities and
enhance shareholders' value.
As a result, the Concerned Shareholder has filed a notice with
the Secretary of the Company for the nomination of six
highly-experienced directors (including four new and independent
directors) (the "Shareholder Nominees"), to be elected to the Board
of Directors of the Company (the "Board") at the upcoming annual
general meeting of shareholders of the Company, which is scheduled
to be held on December 10, 2020 (the
"Meeting").
The Concerned Shareholder also wishes to respond to the
Company's press release dated October 28, 2020 (the
"October 28 Press Release"), which
contains inconsistencies and materially misleading statements.
The October 28 Press Release was
not approved by, nor was the content thereof ever discussed with,
Messrs. Fahad Al-Tamimi and
Peter Damouni, duly-appointed
directors of the Company that comprise one-third of the current
Board. The October 28 Press Release
also fails to accurately reflect the events of the October 22 meeting of the Board and the fact that
several directors objected to the plan that was proposed at that
meeting, which is inadequate and will not create meaningful
shareholders value. The plan was only adopted by a majority of the
Board led by the Incumbent Directors (as defined below) during a
follow-up meeting held on October 27
after the Concerned Shareholder had put forward the Shareholder
Nominees in compliance with the Company's advance notice by-law on
October 26.
Furthermore, the Meeting materials was not approved on
October 22, 2020, as represented by
the Company in the October 28 Press
Release, and the Board has not properly approved the Meeting
materials, contrary to the statement contained in the October 28 Press Release, which Meeting materials
fail to reflect the due filing by the Concerned Shareholder of the
notice under the Company's advance notice by-law. Finally, the
Concerned Shareholder takes note of the Company's confirmation that
the Meeting will take place on December 10,
2020, as provided for in the Company's notice of record and
meeting date filed on SEDAR on October 5,
2020, and expects that the Meeting materials will include
the Shareholder Nominees put forward in accordance with the
Company's advance notice by-law.
The Board's failure to properly approve important matters, its
refusal to work with the Concerned Shareholder in good faith in the
best interests of shareholders, its decision to issue a press
release containing materially misleading statements and its
attempts to stymie the Concerned Shareholder's legitimate efforts
to put forward a new slate of independent and competent directors
that will help to maximize value for all shareholders are
additional evidence of the need for drastic change.
The Shareholder Nominees are described under "Shareholder
Nominees" and are:
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Mr. Tayfun Eldem,
Chief Operating Officer of Baffinland Iron Mines Corporation and
former Chairman of Mason;
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Mr. Nav Dhaliwal,
founder and former President and Chief Executive Officer of
Québec-based Bonterra Resources Inc.;
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Mr. Roy McDowall,
senior officer of Montreal based Turquoise Hill Resources
Ltd.;
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Mr. Simon Marcotte,
co-founder and former Executive, Vice-President Corporate
Development of Mason;
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Mr. Peter Damouni, a
corporate director, who has been appointed to the Board in February
2020; and
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Mr. Fahad Al-Tamimi,
a Saudi-based businessman with global investment activities, who
has been appointed to the Board in June 2020.
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Given the need for a new direction and management, the Concerned
Shareholder believes that the time has come to replace Messrs.
Gilles Gingras, François
Laurin and Guy Chamard
(collectively, the "Incumbent Directors"), who are responsible for
the failed strategy which drove the poor performance of Mason's
shares during the last three years.
The Concerned Shareholder also wishes to confirm that it has
offered Investissement Québec the opportunity to nominate a
representative on the Board.
The Concerned Shareholder intends to file and mail a proxy
circular (the "Dissident Circular") and a form of BLUE proxy
shortly after the filing and mailing of the Company's management
proxy circular and management's form of proxy. The Dissident
Circular will provide further details on the Shareholder Nominees
and the background and reasons why significant changes are
required. The BLUE proxy will provide for the Shareholder Nominees
to be elected individually and for the Incumbent Directors not to
be elected in accordance with Mason's advance notice by-law.
Shareholders as of October 30, 2020
will be able to vote their shares as soon as Mason mails and files
its management proxy circular, which is expected to take place in
the first week of November 2020.
The Concerned Shareholder and other significant shareholders
have come to the conclusion that significant changes are necessary.
In summary:
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The value of Mason
was destroyed between November 2017 and February 2020, its common
shares falling by nearly 90% on the TSX Venture Exchange (the
"TSX-V");
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Mason's trading price
has remained flat since February 2020, with little prospect of
recovery;
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The Company has been
without a proper CEO since February 2020;
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The Incumbent
Directors have been directors of Mason for an average of
5 years, and are directly responsible for Mason's current
state of affairs;
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The Incumbent
Directors failed to propose a legitimate alternative business plan,
and instead intend to continue the same failed strategy, which
essentially results in entrenching themselves;
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When an alternative
plan was proposed by the Concerned Shareholder in February 2020, it
was essentially rebuffed, the Incumbent Directors choosing to stay
the course with their failed strategy and failed to act reasonably
to seek viable alternative strategies;
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The Incumbent
Directors are refusing to consider in good faith ways to maximize
shareholders' value, such as a potential transaction with a
strategic partner; and
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The Incumbent
Directors have no vested interest in the Company and are therefore
completely misaligned with the interests of Mason's
shareholders.
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See "View of Mason and Reasons
for the Recommendation".
View of Mason and Reasons for the Recommendation
The need for a new direction and management is obvious:
Extremely Poor Performance of Mason's Shares in the last
Three Years. Between November
2017 and February 2020, the
price of Mason's common shares on the TSX-V fell by nearly 90%. The
price of Mason's shares have remained flat since then. The
Company's market capitalization remained near its cash position for
most of the year, which speaks volume about the market's view of
the inability of the Incumbent Directors to create shareholder
value. The destruction of the Company's value has taken place under
the oversight of a largely stagnant Board, including the Incumbent
Directors.
No CEO since February
2020. Since the announcement of the creation of the
CEO Search Committee on February 25,
2020 following the Company's former CEO's retirement, the
committee met three times and had its last meeting over seven
months ago. It is critical that a new CEO be appointed as soon as
possible and before a new strategy for the Company is established
so he or she can participate in its development and
implementation.
Failure to Propose a Legitimate Alternative Business
Plan. In February 2020, the
Concerned Shareholder and other supporting shareholders presented
the Chairman of the Board with a business plan, which had been
developed jointly with key shareholders knowledgeable in the
graphite and battery material industry, and which was presented to
the Board on March 13, 2020. This
plan was expected to generate significant Internal Rate of Return
and Net Present Value.
Unfortunately, this business plan was completely ignored by the
majority of the Board and replaced by a plan which was developed by
employees of the Company under the leadership of the Incumbent
Directors and presented to the Board on July
30, 2020. The Incumbent Directors' strategy has resulted in
misappropriation of capital in 2020 and will only result in
continued and long-lasting payments of salaries and directors'
fees, and not in creating value for the shareholders. A similar
plan was presented to the Board on October 22, 2020, which led
the Concerned Shareholder to conclude that the time has come for a
new leadership and direction for the Company. The view of the
Concerned Shareholder is that the Company's current business plan
will not create shareholder value and is not what the shareholders
are looking for or why they have invested in the Company. The plan
is generally oriented on research and product development without
much commercial ambitions and ignores the fundamental shift
happening in the graphite industry.
Refusal to consider ways to maximize shareholders' value,
such as a potential transaction with a strategic partner.
Despite that at least two major shareholders expressed
willingness to explore a potential business combination with a
strategic partner, which would enhance shareholders' value, the
Incumbent Directors have made no meaningful attempt to do. In
addition, the Incumbent Directors has showed no proactivity in
seeking out acquisition opportunities given Mason's strong cash
position. Mason deserves a Board which will actively work for
maximizing its opportunities, will discharge its fiduciary duties
towards the Company, and will act in the best interests of the
Company and enhance shareholders' value.
Absence of Vested Interest. None of the Incumbent
Directors has invested any meaningful capital in the Company since
its inception in 2012, with the exception of the Concerned
Shareholder, who has invested in multiple investing rounds. Aside
from the Concerned Shareholder, the Board owns as a whole less than
0.7% of the equity in the Company. Such complete misalignment with
the interests of Mason's shareholders is almost unparalleled and
certainly uncommon for a junior mining company.
Background to the Nomination of the Shareholder
Nominees
In early 2020, after discussion with other shareholders, the
Concerned Shareholder expressed concerns to Mr. Paul Carmel, then Chairman of the Board, and
requested that significant changes be implemented to the Company's
governance and business plan. A first meeting with Mr. Carmel took
place in Montreal on February 9, 2020, during which a detailed
alternative business plan was presented.
It was also requested that specific changes be made to provide
the Company with a direction and the tools to succeed going
forward. Following this initial and friendly approach, Mr. Carmel
expressed a willingness to work with the Concerned Shareholder and
the supporting shareholders in order to overhaul the Company, which
led to the retirement of the Company's former CEO. However, Mr.
Carmel and the Incumbent Directors ultimately refused to implement
most of the other changes suggested and required in the
circumstances.
The Concerned Shareholder and the supporting shareholders were
not satisfied with the subsequent steps taken by the Board. In an
attempt to improve the Company's future, the Concerned Shareholder
agreed to join the Board on June 11,
2020. Mr. Carmel left the Company at the end of August
2020.
Several attempts have been made by the Concerned Shareholder and
the supporting shareholders to implement changes to the Company
since early 2020. Unfortunately, we must face the fact that little
to no progress has been made by the Incumbent Directors.
Shareholder Nominees
Tayfun Eldem. Mr. Tayfun Eldem brings over 30
years of operations, business development and strategic leadership
experience in the mining and minerals industry. He is currently the
Group Executive Vice President and Chief Operating Officer of
Baffinland Iron Mines Corporation. He was a director of Mason from
November 2012 to February 2016, including as Chairman of the Board
from February 2013 until his
resignation from the Board to pursue other interests. Under his
leadership, Mason raised significant capital and successfully
achieved several technical advancements and regulatory process
milestones, setting the stage for an outstanding stock performance.
Mr. Eldem also oversaw the seed investment into NanoXplore Inc.,
which culminated into a significant capital gain for the Company
when the shares were sold in 2019 for approximately $28.2 million. More recently, Mr. Eldem was
President and Chief Executive Officer of Alderon Iron Ore Corp. and
Managing Director of Iron Ore & Coal for Hatch Ltd., where he
was responsible for business development across five regions of the
world. In addition, Mr. Eldem worked for the Iron Ore Company of
Canada ("IOC"), a Rio Tinto
subsidiary, for more than 20 years. During this period, Mr. Eldem
held many senior roles including Vice President, Expansion Projects
& Engineering, and Chief Operating Officer, where he oversaw
the company operations from the mine through the concentrator and
pellet plant to railway and port. At IOC, he also held
accountability for the development and delivery of a nearly
$2.0 billion program of green and
brown fields expansion projects. Mr. Eldem is a professional
engineer and holds a Bachelor of Electrical Engineering degree from
Dalhousie University along with
Operations Management and Strategic Leadership certificates from
Richard Ivey School of Business and
London Business School
respectively.
Nav
Dhaliwal. Mr. Nav
Dhaliwal is a high-profile mining executive and capital
markets expert with a long running track record of success. Mr.
Dhaliwal was the founding Chief Executive Officer of Québec-based
Bonterra Resources Inc., which made the award-winning Gladiator
discovery in Québec. Mr. Dhaliwal raised over $140 million for Bonterra and played a key role
in the company's market capitalization growth from $10 million to over $150
million. He has founded several other successful companies
in the resource sector, including Gatling Exploration Inc., Pacton
Gold Inc. and Kanadario Gold Inc., which is currently focused on
the exploration and development of the Cameron Lake Property,
located in the west-central part of Québec. Mr. Dhaliwal is also
the founder of the highly successful RSD Capital Corp., which
invests in, and provides management and technical expertise to,
public and pre-IPO companies. Mr. Dhaliwal has a large,
international network of financial connections, including numerous
analysts, brokers, high net worth investors and investment bankers.
He works closely with all of the major gold funds and has been
instrumental in raising over $400
million for companies since 2010.
Roy
McDowall. Mr. McDowall is a capital markets
professional with over 25 years of experience with Canadian-based
boutique and bank owned investment firms, and most recently served
as Managing Director, Head of Equity Sales for Macquarie Capital
Markets Canada. He also held similar positions with Credit Suisse
Securities (Canada) Inc., CIBC
World Markets Inc., and National Bank Financial Inc. Mr. McDowall
is currently a Senior Officer of Turquoise Hill Resources Inc., a
Montreal-based mining company of
approximately $2 billion of market
capitalization listed on both the Toronto Stock Exchange (the
"TSX") and the New York Stock Exchange. The company is focused on
operating and further developing, in the South Gobi region of
Mongolia, the Oyu Tolgoi
copper-gold mine, which is jointly owned with the Government of
Mongolia and expected to be the
world's fourth largest copper producer by 2025. Over his career,
Mr. McDowall has played an instrumental role in over 500 financings
for companies globally with a focus on the mining industry,
leveraging self-established relationships with Canadian and
international institutional investors. He has also founded several
successful start-ups in the education sector and holds a Bachelor
of Commerce degree from the Simon Fraser
University in British
Columbia.
Simon Marcotte. Mr.
Simon Marcotte is a Chartered
Financial Analyst (CFA) with over 20 years of experience with a
focus on commodities, including more than 10 years in executive
positions for junior mining companies, with a focus on battery
materials, mainly in the graphite and lithium sectors. Mr. Marcotte
co-founded Mason in 2012 and held the position of Vice-President
Corporate Development until February
2018. During this period, Mason Graphite was awarded the
"TSX Venture Recognition as Top 10 Performing Stock" in 2013, the
"Best 50 OTCQX" in 2016 and 2017, and was nominated for "Best
Investors Relations" in both 2016 and 2017. At the end of 2017, the
Company reached a peak market capitalization of $365 million, with approximately 35 institutional
shareholders, uncommon for a junior mining company. Prior to 2012,
Mr. Marcotte joined Verena Minerals Corporation in 2010, which was
then renamed Belo Sun Mining Corp., as Vice-President Corporate
Development, working alongside the President and Chief Executive
Officer on all decision-making process and helped develop and
implement a turnaround strategy. Mr. Marcotte was also instrumental
in raising approximately $100 million
in capital for the company, resulting in an increase in market
capitalization from $20 million to a
peak of $400 million and a share
price appreciation of more than 500% over the same period. Mr.
Marcotte has been involved with several other mining companies,
either as an officer or a director, including Alderon Iron Ore
Corp. Prior to his corporate involvement, Mr. Marcotte was working
in senior positions in capital markets with CIBC World Markets
Inc., from 1998 to 2006, and with Sprott Securities Inc. and
Cormark Securities Inc., from 2006 to 2010, where he also was a
member of the Board of Directors. Mr. Marcotte currently acts as an
independent consultant and is actively involved in merchant banking
activities in the junior mining industry. Mr. Marcotte is a
director of Freeman Gold Corp., which is advancing the Lemhi Gold
Project in Idaho, USA.
Peter Damouni. Mr.
Peter Damouni has over 18 years of
experience in investment banking and capital markets, with
expertise in mining and oil and gas. Throughout his career, Mr.
Damouni has worked on and led equity and debt financings valued
over $5 billion. He has comprehensive
experience in equity financing, restructuring, corporate valuations
and advisory assignments. Mr. Damouni is a graduate of McGill University. He is a Canadian and British
citizen, residing in the United
Kingdom. Mr. Damouni is a director of a number of companies
listed on the TSX and the TSX-V.
Fahad Al-Tamimi.
Mr. Fahad Al-Tamimi is a Saudi-based
businessman with global investment activities. He is President and
Chief Executive Officer of SaudConsult, an engineering firm in
Saudi Arabia responsible for many
large infrastructure and construction projects in the country. Mr.
Al-Tamimi is also the Chairman and founder of Tamimi Trading and
Contracting Co. (TIMCO). Previously, he was a 50% partner of
Worley Parsons Arabia, which
undertook major projects in the mining, oil & gas and energy
sectors, in Saudi Arabia, in the
U.A.E and in Bahrain. He has a BSc
in Chemical Engineering and Master of Science in Petroleum &
Civil Engineering from University of
Houston, Texas.
Additional Information
The Concerned Shareholder has given the Company until
October 30, 2020 to confirm in
writing that the Notice either satisfies the requirements of the
Company's advance notice by-law or, if it does not satisfy such
requirements, to contact the Concerned Shareholder's counsel so
that the parties may work in good faith to address any purported
deficiencies as soon as practicable and in any event prior to the
deadline for delivery of advance notice in respect of the
nomination of directors for election at the Meeting under the
advance notice by-law.
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
Shareholder and the group of supporting shareholders are expressing
their view as to the need to elect the Shareholder Nominees and to
remove the Incumbent Directors, there is currently neither a notice
of meeting mailed to the shareholders of Mason in connection with
the Meeting nor are there candidates nominated by the Board or the
Concerned Shareholder for election at the Meeting, and therefore
shareholders of the Company are not being asked at this time to
execute a proxy in favour of the Concerned Shareholder. In
connection with the Meeting, the Concerned Shareholder will file
the Dissident Circular in due course in compliance with applicable
corporate and securities laws.
SOURCE Mr. Fahad Al-Tamimi