TORONTO, July 11, 2012 /CNW/ - Oliver Lennox-King responded today to the decision by the board of directors of Roxgold Inc. (TSXV:ROG) to postpone the company's annual meeting to September 25, 2012.
Mr. Lennox-King said: "The decision to postpone the meeting from its set date of July 12, 2012, is a stunning betrayal of shareholder rights, and is clear evidence that the current board is unwilling to accept the decision of the shareholders they are answerable to that it is time for them to go. This complete lack of respect for shareholder democracy reinforces the view that a change in the board and senior management is long overdue."
At the time of issuance of Mr. Lennox-King's press release of July 9 he had proxies representing approximately 28.5% of the outstanding Roxgold shares entitled to be voted at the meeting. Since that time, shareholders holding an aggregate of an additional 21.1% of the outstanding shares have contacted Mr. Lennox-King or his representatives expressing their support for his proposed Board replacement. Together with the proxies Mr. Lennox-King had on July 9, this represents in the aggregate approximately 49.6% of the outstanding Roxgold shares.
Postponing the meeting date by two and a half months is an outrageous abuse of the shareholders of Roxgold, completely out of step with comparable situations or any responsible standard of corporate governance and further direct evidence of the desire of the Roxgold directors to protect their own economic self-interests at the expense of shareholders. "It is absolutely incredible that the Roxgold directors have seen fit to act in this manner" said Mr. Lennox-King. "I have been involved in the Canadian capital markets for over 32 years, and I cannot recall a more blatant attempt of a public company board to entrench itself."
Mr. Lennox-King has nominated a slate of five highly-qualified and experienced individuals as Roxgold directors. The Lennox-King Nominees are Oliver Lennox-King, Walter Segsworth, Jonathan Rubenstein, Richard Colterjohn and Joseph Spiteri.
"My goal is to bring superior operating performance, governance, and discipline to Roxgold to enhance value for all shareholders", Mr Lennox-King said. "I fully intend to take all steps necessary to protect the interests of all shareholders from any further abuse by the current Roxgold board and to hold the current board liable for any actions taken to further their own interests".
Background:
Mr. Lennox-King has raised a number of serious issues reflecting Roxgold's poor performance and corporate governance:
- Technical Concerns: Serious execution deficiencies relating to the advancement of Roxgold's flagship Yaramoko gold project in Burkina Faso, including: a persistent assay backlog which has compromised timely feedback for guiding drilling and regional exploration activities and inadequate initiatives to address this backlog; lack of systematic, scientific approach to drill hole sequencing, including unnecessary high risk "Hail Mary" type wide step-out holes; and a lack of timely initiation of other critical project evaluation and community engagement activities;
- Management Concerns: Failure to recruit and develop an experienced senior management team and technical staff to advance the Yaramoko project from discovery phase to evaluation phase. Roxgold still has only one senior geologist operating on a rotation basis, and management remains reliant on local geologists and contractors to undertake roles that should be undertaken by the company;
- Governance Concerns: Since the incumbent board joined Roxgold in late 2010, the board has awarded approximately 12.5 million options, despite the fact that Roxgold had only 13.5 million shares outstanding in total as recently as October 26, 2010. This rapid issuance of options by the current board has resulted in more than 98% of available options under the company's rolling 10% stock option plan having now been utilized, during a period in which the shares outstanding have increased by nearly ten times, to 122.0 million shares as of June 4, 2012. Incredibly, the existing board has not only issued options at such an excessive rate, but has also seen fit to grant most of these stock options to themselves, while at the same time the non-executive directors paid themselves aggregate cash bonuses of $240,000 in FY2011 and also paid the CEO an additional $113,000 for serving as a director. By issuing almost the entirety of available stock options largely to their own benefit, the existing board has seriously hampered Roxgold's ability to recruit and develop an experienced senior management team and technical staff; and
- Share Price Performance: Roxgold's share price has fallen from $2.27 on March 5, 2012, to
.56 on July 6, 2012, a decrease of 75.3% in just over four months.
Forward-Looking Statements
Certain statements in this press release contain forward-looking information within the meaning of applicable securities laws in Canada ("forward-looking information"). The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words.
The forward-looking information in this press release includes, but is not limited to: the nomination and election of the Lennox-King Nominees and replacement of Roxgold's current directors; the timing and holding of the Roxgold meeting; and the future prospects of Roxgold.
In connection with the forward-looking information contained in this news release, Mr. Lennox-King has made numerous assumptions. While Mr. Lennox-King considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others, that the Lennox-King Nominees may not be elected to the board of Roxgold.
All forward-looking information in this press release is qualified in its entirety by this cautionary statement and, except as may be required by law, Mr. Lennox-King undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.
For further information:
Media Contact:
Bernard Simon
Vice-President, Kingsdale Communications Inc
bsimon@kingsdalecommunications.com
416 867 2304