Just 1 year ago we were here. CONCERNED SHAREHOLDERS OF PACIFICORE MINING CORP.
INTEND TO FILE AND MAIL A DISSIDENT'S INFORMATION CIRCULAR TO OFFER CHANGE FOR THE BETTER
Shareholders of PacificOre Mining Corp. intend to file and mail an information circular with Canadian securities regulators and have initiated a proxy solicitation process with the objective of having a new board of directors elected at the company's annual general and special meeting of shareholders to be held on April 26, 2013. Copies of the dissident information circular will be mailed to shareholders in the next week and will be available online at SEDAR or by contacting Computershare Investor Services Inc. The concerned shareholders are seeking to elect Adrian Bakker, Stephen Pearce and Paul Sorbara to the board. The dissident nominees are successful businessmen with significant experience in geological exploration.
The concerned shareholders have initiated this proxy solicitation because they have lost all confidence in the ability of the current management of the company to maximize shareholder value. The company has failed to advance any of the company's projects significantly and continues to struggle just to preserve its limited financial resources. During 2012 the company spent $1,851,506 in administration costs and spent only $296,665 in exploration costs. Since March, 2011, the share price of the company has decreased substantially. The concerned shareholders strongly believe that the proposed nominees for directors slated by the current management of the company are not in shareholders' best interests; instead, they are being proposed for re-election to further entrench current management, who have failed to effectively manage the affairs of the company and deliver shareholder value.
The concerned shareholders believe that the dissident nominees have the necessary experience in geological exploration, as well as skills in business, capital markets, finance and accounting, to enhance shareholder value and allow the company to realize on its potential. For further information on each of the dissident nominees, please see the dissident information circular under the heading Profiles of the dissident nominees.
The concerned shareholders urge shareholders to review the dissident information circular and to vote only their green proxy (accompanying the dissident information circular and also available on SEDAR under the company's profile) no later than April 24, 2013, at 5 p.m. (Pacific Time) by signing, dating and sending their green proxy by:
- E-mail to Computershare Investor Services Inc.;
- Fax to Computershare Investor Services Inc. at: 1-866-249-7775;
- Mail to Computershare Investor Services Inc., 100 University Ave., ninth floor, Toronto, Ont., M5J 2Y1.
If you are a non-registered holder of common shares of the company, please follow the instructions under the heading of non-registered shareholders in the dissident information circular.
If you have already voted in favour of management's nominees and resolutions, you may change your vote by submitting a green proxy with a later date. A later green proxy automatically revokes any earlier proxy given, including a white management proxy.
The concerned shareholders believe that a prosperous future for the company and its shareholders is still attainable, but only if the company becomes fiscally responsible and effectively develops its business under new leadership.
The letter to shareholders below is part of the dissident information circular available on SEDAR and outlines the concerns of the concerned shareholders as well as their plans for the company.
A letter to shareholders of PacificOre Mining
Dear fellow PacificOre shareholder:
I am writing on behalf of the concerned shareholders (as defined in the attached dissident's information circular) to ask for your support at the annual general meeting of PacificOre Mining Corp. scheduled to be held on Friday, April 26, 2013, in Vancouver, B.C.
Unfortunately, the actions of management and the current board of directors have forced us to take action to protect our investment and that of all shareholders. The concerned shareholders do not have confidence in their ability to increase shareholder value. Set out below are reasons why we believe that a change at the top is needed at the company and what you as a shareholder can do to create it.
Governance concerns
The current board has exhibited a disturbing lack of concern for shareholder interests. According to the company's latest audited financial statements the company spent only $296,665 on exploration during its 2012 fiscal year while its administrative costs were in excess of $1.8-million. It is time the company becomes an exploration company, not an administrative company. The company has been planning a drill program since July, 2012, and has finally announced a small program in March, 2013, with the meagre funds it has left. If only a fraction of the funds spent on administration last year was put into the ground, PacificOre could be in a much better place today. Management's lack of focus on exploration is not limited to the past year. Since 2005 management has spent more on administration than exploration every single year. Administration costs exceeded exploration costs by a staggering $10-million over this period and there is absolutely nothing to suggest this pattern will not continue under current management.
Lack of focus is also destroying value for PacificOre shareholders. Specifically, spinning out assets through one of the company's many subsidiaries, one being Pro Minerals Inc. Pro Minerals was the first subsidiary spinout of company assets on the TSX Venture Exchange. With an IPO price of 25 cents, we contend many people recognized the value of these assets. Pro Minerals has been halted from trading on the TSX Venture Exchange since September, 2012 (last price one cent), and management has demonstrated no efforts or plan to have Pro Minerals trading again. PacificOre is the largest shareholder of Pro Minerals and all the directors of Pro Minerals are also directors of PacificOre, they have succeeded in destroying any value which might have accrued to PacificOre shareholders from this shareholding.
It appears management has further diverted PacificOre assets through another of these subsidiaries, Priority Ventures Corp. According to the company's latest audited financial statements its investment in Priority Ventures has been diluted from one year ago while at the same time amounts owing from Priority Ventures to the company has increased. A double hit to the company and another example management's lack of focus on building value for shareholders.
Excessive compensation
The board of directors has seen fit to pay Mr. O'Brien in excess of $2-million over the past 10 years. His benefits extend beyond the millions of dollars and options, the board of directors authorized the lease of a Cadillac Escalade to Mr. O'Brien at a significant cost to the company. The company's 2012 audit states the company's minimum lease payments over the next five fiscal years are 2013 -- $46,330, 2012 -- $44,190 and 2015 -- $33,143. If this was not enough, Mr. O'Brien received further consideration from Pro Minerals, formerly a wholly owned subsidiary of the company, in the amount of $290,000 over the past three years, according to the company's most recent proxy filings.
Excessive option grants
The company had 21,159,013 options outstanding according to its latest audited financial statements, representing approximately 15 per cent of the issued and outstanding shares. Incredibly, the board of directors have seen fit to grant most of the stock options to its chief executive officer, Patrick O'Brien. According to Mr. Obrien's insider reporting filing he held 7,873,000 options.
PacificOre's dismal share price performance under the current board
PacificOre's shares declined no less than 90 per cent in two years following the award of claims covering the world-class project, the Lac Dore project.
Time for real change
The company is at a critical point. The company needs proper guidance now from an experienced board for maximum value to be achieved for all shareholders. Execution is critical to the company's success. Historical performance demonstrates that there is a significant risk of a loss of shareholder value if the management nominee slate is elected. The concerned shareholders strongly believe that the proposed nominees for directors by the current management of the company are not in shareholders' best interests; instead, they are being proposed for re-election to entrench current management further, which has failed to manage the affairs of the company effectively and deliver shareholder value.
The concerned shareholders believe that a prosperous future for the company and its shareholders is still attainable, but only if the company becomes fiscally responsible and effectively develops its business under new leadership. The dissident nominees offer change for the better. Vote your green proxy today. If you have any questions in connection with the completion and delivery of your green proxy, please call Adrian Bakker or Stephen Pearce at 1-604-351-9924 and one of them would be pleased to assist you.
Yours Sincerely,
Concerned shareholders