Mason Graphite inc. ("Mason Graphite" or the
“Company") (TSX.V: LLG; OTCQX: MGPHF) is disappointed by Fahad
Al-Tamimi’s (“
Al-Tamimi”) latest self-serving
tactics. The Company would like to set the record straight and
correct misleading and false assertions made by Al-Tamimi to try
and garner shareholder support.
• Al-Tamimi’s Misleading Allegations Relating to
Alternative Business Plan. Al-Tamimi states that the Mason
Graphite Board of Directors (the “Board”) did not
evaluate the alternative business plan he put forward. The fact is
Al-Tamimi NEVER presented a formal plan to the
Board for review. Instead, the Board was only provided with a
conceptual approach stemming from his discussion with the former
Chairman of the Board/Interim CEO. This approach, which centered
around coated graphite, was unsupported by a clear business
strategy, market analysis, budgets or quantified facts.
Notwithstanding the unsupported nature of Al-Tamimi’s plan, the
Board Chair tried to accommodate Al-Tamimi by meeting with a
potential supplier of spherical graphite. In an effort to test the
theory, Management attempted to work on Al-Tamimi’s conceptual
approach and ultimately improved on it by adding a value-added
product (“VAP”) strategy and plan as part of a broader and
integrated graphite business. In the April 9, 2020 press release,
Mason Graphite announced that given the graphite market conditions,
it would re-prioritize its projects and postpone its mine and
concentrator project in order to focus on the “second
transformation phase” project: coated spherical graphite. This
decision was supported by the Board, including Al-Tamimi’s recently
appointed representative on the Board.
• Al-Tamimi’s Cherry-Picked Data to Benefit his
Cause. Al-Tamimi claims that from the high closing price
of the stock in 2017 the stock price is down about 90%. This
biased, cherry-picked view fails to realize that in the past twelve
months, the stock is actually up 66.67%, and on the five-year basis
the stock is only marginally down 7.9%. Al-Tamimi also claims that
in the days following the announcement of his dissident director
nominees on October 29, 2020, the Company’s share price began to
recover. He conveniently omits the fact it is likely due to Mason
Graphite’s own news release post-market close on October 28, 2020
which detailed the VAP or 2nd Transformation Project. Shareholders
responded favourably to the Company’s news and caused the share
price to rise approximately 16% on that day. Since October 29,
2020, the stock market generally has seen unprecedented optimism
for many factors that are unrelated to Al-Tamimi’s action including
the U.S. presidential election, COVID-19 vaccine announcements and
general optimism in the economy.
• Al-Tamimi’s Omission of Self-Serving
Requests. The Board has demonstrated a willingness to work
with Al-Tamimi as illustrated below. However, Al-Tamimi’s demands
continued to be more elaborate and self-serving:
- In February
2020, the Board accepted Al-Tamimi’s request to appoint a
representative onto the Board;
- After the
departure of CEO Benoît Gascon in March 2020, Mr. Paul Carmel, then
Chairman of the Board, was also appointed interim CEO, a position
he held until his departure on August 31, 2020. The Board set up a
CEO search committee, which included Al-Tamimi’s Board
representative, in order to initiate the process of finding a CEO.
The Board confirmed it was prepared to consider candidates
Al-Tamimi’s representative would bring forward: he put forward Mr.
Simon Marcotte, who previously held Investor Relations roles with
the Company. Mr. Marcotte met with several Company executives in
early April;
- On April 16,
2020, Al-Tamimi demanded:
- the resignation of the entire Mason Graphite Board, and
- the appointment of Mr. Marcotte as CEO;In alignment with their
fiduciary duty to act in the best interests of ALL shareholders,
the Board did not comply with Al-Tamimi’s threats;
- In an effort to
negotiate again, in June 2020, the Mason Graphite Board agreed to
Al-Tamimi’s request to join the Board and he was appointed on June
11, 2020.
• Al-Tamimi’s Distorted Facts Relating to
Shareholder Alignment of the Board. With respect to
Al-Tamimi’s comment relating to the Board’s shareholder alignment
and ownership of shares, these are the facts:
- The Board and
Management have been in a ‘black out” period since April 2018.
Therefore, no members of the Board nor Management have been able to
transact Mason Graphite shares and options;
- In terms of
ensuring shareholder alignment, over 20% of the outstanding shares
are represented on the current Board.
AL-TAMIMI’S NOMINEES LACK THE DEPTH TO
MOVE MASON GRAPHITE FORWARD AND ULTIMATELY WILL ONLY SERVE HIS OWN
AGENDA:
Mason Graphite would like to remind shareholders
that Al-Tamimi and his nominees:
- Lack
credibility; it is an interconnected group that will serve only one
shareholder: Al-Tamimi;
- Lack the
in-depth graphite mining and graphite transformation knowledge they
claim to have. It is an extremely misleading exaggeration to say
that the individuals proposed are highly qualified and competent in
the industrial minerals and graphite industry;
- Have no track
record of success in building sustainable and profitable industrial
minerals mining operations in Québec;
- Al-Tamimi is an
“opportunistic” shareholder who undoubtedly views the Company’s
strong cash position as an opportunity to enrich himself at the
expense of all Mason Graphite shareholders;
- While the
current Mason Graphite Board is proud to embrace the sound strategy
of keeping the residency of the majority of its members within
Quebec, Al-Tamimi’s dissident slate is compromised on this front
and Al-Tamimi specifically excluded a representative of
Investissement Quebec, the Company’s single largest shareholder,
that has invested Quebec government money in Mason Graphite which
it considers to be a strategic mineral resource. Furthermore,
Investissement Québec has a contractual right to appoint a nominee
on the Board. This is a clear example of Al-Tamimi’s inexperience
of what a sound and representative Board should comprised of.
MASON GRAPHITE IS WELL POSITIONED TO
GROW – Support Management’s Director Nominees
Mason Graphite is well positioned to continue to
grow with its sound business plan. Key items are highlighted
below:
- Positive
Foresight. In view of difficult graphite market
conditions and the challenges relative to financing the mine
construction, including the highly dilutive impact on existing
shareholders, value-added graphite products (VAP) became
the Company’s main focus as a result of growing market demand and
superior economics for these products. This decision was further
supported by a high-level technical and economic study which
concluded that a VAP plant, for the production of coated spherical
graphite used for Li-ion batteries, presented sufficient potential
to justify more in-depth analysis and a rigorous testing of
products was undertaken. THIS STRATEGY WAS SUPPORTED BY THE ENTIRE
BOARD, INCLUDING THE REPRESENTATIVE OF AL-TAMIMI. Demand for these
technically sophisticated products in the battery materials sector
is currently growing, which means that the Company’s foresight in
investing time and resources in this area was prescient and
timely.
-
Operationally Solid. Today, Mason Graphite is
virtually ready for the upcoming rebound in the graphite market.
The Company has all the required permits to start mine construction
and the engineering for the mine and plant is 75% complete.
-
Strategic Partners. The Board has been in an
on-going dialogue with its various stakeholders on the future
direction of the Company. As part of this process, it has engaged a
strategic advisory firm to assist it in the evaluation of several
potential strategic partners in the battery materials and mining
industry. The selection of the firm was approved by the Board.
IN SUMMARY
A. The Board has demonstrated a willingness to collaborate and
work with Al-Tamimi:
- It appointed his two (2) nominees to the Board of Directors,
which more than represents his position;
- It appointed his Board representative as Chair of the
Governance committee, member of the CEO search Committee and member
of the Strategic Committee;
- It accepted his input in determining corporate strategy.
B. The Board has maintained a strong cash position through lean
management and the judicious use of financial resources over the
past year, which makes it a highly attractive target for
opportunistic self-serving “corporate raiders.”
C. The Board is committed to ensuring the Company becomes a
sustainable and profitable value-added producer in the strategic
minerals sector and to providing superior value for
shareholders.
D. The Board has kept a disciplined focus and has put in place
the building blocks to capitalize on the market’s eventual rebound
and has completed several key process and product milestones.
E. The Board has a superior appreciation of the challenges in
bringing to market industrial minerals that meet clients’ needs and
it has the expertise required in financing, project development,
operations as well as knowledge of the Quebec business
environment.
F. Mason Graphite is no longer a “junior mining company” as
perceived by Al-Tamimi and his nominees. Through the addition of a
value-added product strategy, Mason Graphite has evolved into a
mining, R&D and graphite transformation company ready to become
a leading supplier in the mineral battery industry.
SHAREHOLDERS SHOULD BE WARY OF THE TRUE MOTIVES
OF AL-TAMIMI AND HIS QUESTIONABLE HAND-PICKED SLATE. DO NOT BE
FOOLED - AL-TAMIMI’S SELECTIVE DISCLOSURE IS CLEARLY ONLY TO SERVE
HIS OWN AGENDA AT YOUR COST.
MASON GRAPHITE BOARD
RECOMMENDATION
The Board recommends shareholders vote
using only Management’s proxy, FOR Management’s
Nominees, in order to protect their investment and
the future development of the Company.
If shareholders have already voted in favor of
Al-Tamimi based on inaccurate information provided to them, they
can change their vote by simply voting again using Management’s
proxy prior to December 23, 2020 at 10:00 a.m. (Eastern Time).
VOTE TO SUPPORT THE CURRENT
BOARD
In order to ensure the opportunistic and
self-serving Al-Tamimi and his nominees are not given the
opportunity to take the reins of Mason Graphite, all shareholders
are encouraged to vote well in advance of the deadline of December
23, 2020 at 10:00 a.m. (Eastern Time).
Shareholders are encouraged to review
Management’s materials and vote using only Management’s proxy FOR
Management’s nominees. For up-to-date information please visit the
Company’s website at www.masongraphite.com.
The Company has retained Laurel Hill as its
shareholder communications advisor and proxy solicitation agent.
Laurel Hill will receive a proxy solicitation fee of $75,000 for
its services plus disbursements. All costs of solicitation by
Management will be borne by the Company.
SHAREHOLDER QUESTIONS AND VOTING
ASSISTANCE
Please contact the Company’s shareholder
communications advisor and proxy solicitation agent, Laurel Hill
Advisory Group at:
Toll Free: 1-877-452-7184
Email: assistance@laurelhill.com
About Mason Graphite
Mason Graphite is a Canadian corporation
dedicated to the production and transformation of natural graphite.
Its strategy includes the development of value-added products,
notably for green technologies like transport electrification. The
Company also owns 100% of the rights to the Lac Guéret graphite
deposit, one of the richest in the world. The Company is managed by
an experienced team cumulating many decades of experience in
graphite, covering production, sales, as well as research and
development.
Mason Graphite inc.
Ana Rodrigues at info@masongraphite.com or
1 514 289-3580
Head Office: 3030, boulevard Le Carrefour, suite
600, Laval, Quebec, Canada, H7T 2P5
Cautionary Statements
This press release contains "forward-looking
information" within the meaning of Canadian securities legislation.
All information contained herein that is not clearly historical in
nature may constitute forward-looking information. Generally, such
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will be taken", "occur" or "be achieved". Forward-looking
information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
forward-looking information, including but not limited to: (i)
volatile stock price; (ii) the general global markets and economic
conditions; (iii) the possibility of write-downs and impairments;
(iv) the risk associated with exploration, development and
operations of mineral deposits; (v) the risk associated with
establishing title to mineral properties and assets; (vi) the risks
associated with entering into joint ventures; (vii) fluctuations in
commodity prices; (viii) the risks associated with uninsurable
risks arising during the course of exploration, development and
production; (ix) competition faced by the resulting issuer in
securing experienced personnel and financing; (x) access to
adequate infrastructure to support mining, processing, development
and exploration activities; (xi) the risks associated with changes
in the mining regulatory regime governing the resulting issuer;
(xii) the risks associated with the various environmental
regulations the resulting issuer is subject to; (xiii) risks
related to regulatory and permitting delays; (xiv) risks related to
potential conflicts of interest; (xv) the reliance on key
personnel; (xvi) liquidity risks; (xvii) the risk of potential
dilution through the issue of common shares; (xviii) the Company
does not anticipate declaring dividends in the near term; (xix) the
risk of litigation; and (xx) risk management.
Forward-looking information is based on
assumptions management believes to be reasonable at the time such
statements are made, including but not limited to, continued
exploration activities, no material adverse change in metal prices,
exploration and development plans proceeding in accordance with
plans and such plans achieving their stated expected outcomes,
receipt of required regulatory approvals, and such other
assumptions and factors as set out herein. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such forward-looking information will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such forward-looking
information. Such forward-looking information has been provided for
the purpose of assisting investors in understanding the Company's
business, operations and exploration plans and may not be
appropriate for other purposes. Accordingly, readers should not
place undue reliance on forward-looking information.
Forward-looking information is made as of the date of this press
release, and the Company does not undertake to update such
forward-looking information except in accordance with applicable
securities laws.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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