Mayfair Gold Corp. (“
Mayfair” or the
“
Company”) (
TSX-V:
MFG; OTCQB:
MFGCF) today announced that it has filed its
management information circular (the “
Information
Circular”) and related proxy materials in connection with
its upcoming Annual General and Special Meeting of Shareholders to
be held on June 5, 2024 (the “
Meeting”). The
Information Circular includes a Letter to Shareholders from Harry
Pokrandt, Chairman of the Company’s board of directors (the
“
Board”). The Company also announced it has
entered into a Settlement Agreement (as defined below) with certain
employees of the Company to ensure the retention of their services
on behalf of Mayfair up to the Meeting.
The Board unanimously recommends that
shareholders vote to RE-ELECT as directors each of Harry Pokrandt,
Patrick Evans, Christopher Reynolds and Douglas Cater (the
“Company Nominees”). The Board further recommends
that shareholders REJECT the resolutions proposed by Muddy Waters
Capital LLC (“Muddy Waters”), including the
resolution to elect as directors its four nominees: Carson Block,
Darren McLean, Freddy Brick, and Anthony Jew (the “Muddy
Waters Nominees”).
Harry Pokrandt, Chairman of the Board, Mayfair
Gold, commented:
“The current Board
has the experience, track record, and strategic vision to continue
creating value for shareholders, and its consistent delivery on key
objectives warrants reappointment for another year. The proposal to
replace a proven team that has performed near the top of its peer
group with a set of novice directors who lack any operational
mining experience and have presented no plan for the Company is one
that we simply cannot support.”
Reasons for the
Recommendations
The Board’s recommendations are based on a
number of carefully considered factors, each described more fully
in the Information Circular. The reasons include the following.
Stark contrast between the experience
and qualifications of the two sets of nominees. The
Company Nominees have held operational or executive roles at more
than 23 mining companies for a collective total of 90 years, and
director positions at another 27 publicly traded mining companies.
In contrast, to the knowledge of the Company, none of the Muddy
Waters Nominees have experience as a director or officer of a
Canadian public company, or experience operating a mining or
mineral exploration company. Muddy Waters has offered no business
plan or strategic vision for the Company.
The existing Mayfair team has executed
effectively with positive results. Since acquiring the
Fenn-Gib Project, the Company has: (1) grown the Fenn-Gib Indicated
gold mineral resource estimate by more than 60% through ongoing
mineral resource drilling; (2) made two new discoveries at the
Footwall and Contact Zone, both adjacent to the main deposit; (3)
completed three years of baseline environmental studies; (4)
completed advanced pre-feasibility study (“PFS”)
level metallurgical studies; (5) completed PFS-level geotechnical
and hydrogeology studies; (6) commenced the PFS for its Fenn-Gib
Project in March 2024; (7) commenced the 2024 environmental field
program; (8) appointed a Vice President Technical Services to
manage the Fenn-Gib technical programs; and (9) advanced its
Recruitment Process to identify experienced and technically skilled
candidates to join the Board.
Successful execution has been reflected
in the Company’s premier valuation. Over the past year,
the Company is among the top-performing gold stocks among Canadian
gold mining exploration and development companies. The Company’s
share price is up approximately 27%, compared to the average of its
peer group1 which are down approximately 19%. The Company’s share
price has outperformed the 17% increase in the price of gold during
the same time period. Furthermore, the Company’s price to net asset
value multiple of 0.56 far exceeds its peer group average of
0.26.
Loss of entire management team and
change of control payments. Mayfair’s senior management
have employment contracts which permit them to terminate their
employment with the Company and receive a change of control payment
at any time following a change of control. On May 1, 2024,
Mayfair’s management team, including Patrick Evans (CEO), Justin
Byrd (CFO), Howard Bird (VP Exploration) and certain other
employees (the “Terminating Employees”), advised the Board that the
actions of Muddy Waters constituted a change of control and that
management was terminating their employment with the Company and
required change of control payments to be made. The Board
subsequently entered into the Settlement Agreement pursuant to
which the management team agreed to remain with the Company through
the Meeting to provide for continuity of operations. However,
management has been extremely clear that following the Meeting,
they are unwilling to continue their employment with the Company if
the Board is comprised of inexperienced Muddy Waters Nominees.
Muddy Waters has not indicated whether they have a new management
team in place to oversee the Company’s operations following the
Meeting. The loss of the Company’s senior-level talent could
materially set back the development of the Fenn-Gib Project and
risk a delisting by the TSX Venture Exchange
(“TSXV”). In addition, the resulting change of
control payments—which total approximately $4.0 million— would
deplete the treasury of funds that could be better spent on
advancing the Fenn-Gib Project and may necessitate additional
(potentially dilutive) financing. For more information, see
“Employee Settlement Agreement” below.
Additional risks inherent in the Muddy
Waters resolutions. The potential consequences of
replacing proven directors with untried newcomers include the
following:
- Damage to
relationships with the local community, including the Apitipi
Anicinapek Nation (the “AAN”) on whose territory
the Fenn-Gib Project is located. The leadership of the AAN has
expressed deep concerns about the future of the relationship and
this project, given the lack of contact from Muddy Waters and its
lack of experience in dealing with First Nations in today’s climate
of reasserting control.
- Risk of a
de-listing of the Company’s shares on the TSXV due to the Muddy
Waters Nominees’ lack of technical expertise and reporting issuer
experience, as well as the lack of independence required of audit
committee members.
- Risk of a loss
of foreign private issuer status in the United States due to three
of the four Muddy Waters Nominees residing in the U.S.
- Jeopardizing
further value creation that can be expected to accrue to the
Company’s shareholders through continued pursuit of the proven
strategy for developing the Fenn-Gib Project.
- Fundamental
skillset mismatch resulting from Muddy Waters’ track record as an
activist short seller that takes advantage of short-term downswings
in company share prices, rather than the long-term outlook and
highly technically geoscience and engineering skillsets needed to
de-risk and advance a mine development project.
The Board is committed to good governance and
value creation and remains focused on progressing the Company’s
flagship asset. The Board believes that its fiduciary duty to act
in the best interests of the Company requires it to ensure that all
shareholders are fully informed about the choices available to them
in a vote which will have major consequences for the future of the
Company.
Vote for Experience. Vote the WHITE
Proxy Card.
The Board advises shareholders to vote the WHITE
Proxy or voting instruction form well in advance of the deadline at
2:00 p.m. (Pacific time) on June 3, 2024. Shareholders
who have any questions relating to the Meeting or about the
completion and delivery of the WHITE Proxy or voting instruction
form may contact Alliance Advisors, LLC by telephone at
844-858-7380, or email at Mayfair@allianceadvisors.com.
Additional details relating to the matters to be
voted upon at the Meeting and the Board’s recommendations are
included in the Information Circular, which is available on
www.sedarplus.ca, as well as the Investor Resources section of the
Company’s website at
https://mayfairgold.ca/investor-resources/.
Advisors
Alliance Advisors is acting as strategic
shareholder advisor to Mayfair Gold. Borden Ladner Gervais LLP is
acting as legal counsel to the Board. Oakstrom Advisors is acting
as communications advisor to the Company.
Employee Settlement
Agreement
On May 1, 2024, the Terminating Employees
advised the Board that the actions of Muddy Waters constituted a
change of control and that, as a direct consequence of Muddy
Waters’ repeated threats of litigation and demands that the Company
not honour its contracts with its employees, management was
terminating their employment with the Company and required the
change of control payments to be made. On May 6, 2024, the Company,
having received independent legal advice, entered into a settlement
agreement (the “Settlement Agreement”) with the
Terminating Employees, whereby the Terminating Employees agreed to
hold the termination of their employment in abeyance and continue
with the Company up to the Meeting.
In exchange, the Company delivered approximately
$4.0 million (the “Change of Control Payment”)
into trust. The amount of this Change of Control Payment represents
the aggregate termination payments payable in respect of a change
of control pursuant to the Terminating Employees’ employment
agreements. Pursuant to the Settlement Agreement, the Change of
Control Payment will be released to the Terminating Employees, in
accordance with the requirements of their existing employment
contracts with the Company, upon a change in the composition of the
Board that results in the current directors constituting less than
a majority of the members of the Board. If current members of the
Board remain in the majority following the Meeting, the Terminating
Employees may elect to rescind their notice of termination and
remain employees of the Company, and their respective Change of
Control payments will be returned to the Company.
Scientific and Technical
Information
Scientific and technical information contained
in this news release has been derived, in part, from the Company’s
technical report titled “National Instrument 43-101 Technical
Report Fenn–Gib Project, Ontario, Canada” with an effective date of
April 6, 2023, and reviewed and approved by Tim Maunula, an
independent “qualified person” pursuant to National Instrument
43-101 – Standards of Disclosure for Mineral Projects.
About Mayfair
Mayfair Gold is a Canadian mineral exploration
company focused on advancing the 100% controlled Fenn-Gib gold
project in the Timmins region of Northern Ontario. The Fenn-Gib
gold deposit is Mayfair’s flagship asset and currently hosts an
updated NI 43-101 resource estimate with an effective date of April
6, 2023 with a total Indicated Resource of 113.69M tonnes
containing 3.38M ounces at a grade of 0.93 g/t Au and an Inferred
Resource of 5.72M tonnes containing 0.16M ounces at a grade of 0.85
g/t Au at a 0.40 g/t Au cut-off grade. The Fenn-Gib deposit has a
strike length of over 1.5km with widths ranging over 500m. The gold
mineralized zones remain open at depth and along strike to the east
and west. Recently completed metallurgical tests confirm that the
Fenn-Gib deposit can deliver robust gold recoveries of up to
94%.
ON BEHALF OF THE BOARD OF DIRECTORS
For further information contact:Patrick Evans,
President and CEOPhone: (416) 670-5114Email:
patrick@mayfairgold.caWeb: www.mayfairgold.ca
Media contact:John Vincic, Oakstrom
AdvisorsPhone: (647) 402-6375Email: john@oakstrom.com
For information on voting:Alliance Advisors,
LLC Phone: 1-844-858-7380Email: Mayfair@allianceadvisors.com
Forward Looking Statements
This news release contains forward-looking
statements and forward-looking information within the meaning of
Canadian securities legislation (collectively,
“forward-looking statements”) that relate to
Mayfair’s current expectations and views of future events,
including the Company’s Recruitment Process, the 2024 environmental
field program, the loss of the Company’s senior management and the
respective change of control payments, the rescission of any
termination notices by any of the Terminating Employees, damage to
the Company’s relationship with AAN, the risk of de-listing of the
Company’s shares on the TSXV, the risk of a loss of the Company’s
foreign private issuer status, and jeopardizing further value
creation of the Fenn-Gib Project. Forward-looking statements and
may involve estimates, assumptions and uncertainties which could
cause actual results or outcomes to differ materially from those
expressed in such forward-looking statements. No assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this news release should not
be unduly relied upon. These statements speak only as of the date
of this news release.
Forward-looking statements are based on a number
of assumptions and are subject to a number of risks and
uncertainties, many of which are beyond Mayfair’s control, which
could cause actual results and events to differ materially from
those that are disclosed in or implied by such forward- looking
statements. Such risks and uncertainties include, but are not
limited to, the results of the Board recruitment process. Mayfair
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by law. New factors emerge
from time to time, and it is not possible for Mayfair to predict
all of them, or assess the impact of each such factor or the extent
to which any factor, or combination of factors, may cause results
to differ materially from those contained in any forward-looking
statement. Any forward-looking statements contained in this news
release are expressly qualified in their entirety by this
cautionary statement.
Neither the 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 news release.
1 The Company’s peer group includes: Osisko Mining Inc., Skeena
Resources Limited, Probe Gold Inc., Tudor Gold Corp., Troilus Gold
Corp., O3 Mining Inc., STLLR Gold Inc., First Mining Gold Corp.,
Fury Gold Mines Limited, Northern Superior Resources Inc., Radisson
Mining Resources Inc., Cartier Resources Inc., Cassiar Gold Corp.,
Treasury Metals Inc., and Talisker Resources Ltd.
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