Letter sent to Mr. Zelenski Mr Zelenski,
I am a significant minority shareholder with 1.5 million shares of High River Gold. As a very long time supporter of HRG's growth plans, I have been around for much longer than Severstal - and therefore I am keenly aware of the long road to get HRG's assets in good operating order. On this, I do congratulate your team.
I am writing to briefly make you aware of my concerns with the offer, and just a select few issues with Nord Gold's oversight with respect to retail shareholders, release of data and actions detrimental to HRG's true value.
I believe my views are shared by many present HRG & Nord Shareholders and I most certainly believe my concerns are in the mind of potential shareholders of Nord Gold - many of whom have thus far elected to stay on the sidelines. I believe without fundamental changes, this will continue to be the case. Hence my major concern.
Firstly, while Nord/Severstal has made a legal farce of out acquiring as many shares of HRG as possible, the methods employed were completed in a way which demonstrates numerous planned approaches which have harmed the value of HRG minorities share value while enriching Nord/Severstal what I believe is and was a deceitful manner. I cannot fault the goal of being a buyer of HRG shareholder, but I can fault what I see as the actions and methods deployed. You are certainly wise enough to understand that being on this side of the fence, actions have effects which polarize the two camps - Severstal/Nord and HRG's shareholders. Yes you can find 'friends' as you twist the share price and employ third party friends to join the war, but this is not the way to grow an international gold mining company to a positive peer valuation. Shortsightedness has the effect of long term blindness in the marketplace. You have a front row seat to this effect now.
For Nord to realize market acceptance of its true potential, it has nothing to do with adding GPS onto the trucks in the fleet as stated in your most recent news release. It has to do with being honest, and managing, AT ALL COSTS, with complete integrity, clarity, transparency and openly building value through these actions - each and every hour of the day - towards your most valuable asset High River Gold. What I and many others have seen is ruthlessly and aggressively finding ways to push down value to make your multi-year transaction work. If there was complete honesty and efforts to show value rather than destroying HRG's value, it would have worked naturally - and Nord and HRG's value would be double or triple what it is today.
Has your team managed to increase efficiencies? Yes. But at what costs have the other actions harmed Nord's value? Far greater as you are aware.
From the moment the first HRG buyout offer was made, it is most unfortunate that consistently, the same approach was taken time and time again, to the point that you alienated the very retail and institutional shareholders and POTENTIAL future supporters through these actions. Why would I or anyone want to be associated with Nord's management team - and trust it for the next step?
Do not think I do not believe you have good assets - and you can make it work - but - here is the important point - I cannot trust Management without seeing a change.
Therefore, true PEER valuation of HRG - not false Peer valuation - is what I would take in a buyout offer.
Not whatever the "Independent Directors" suggest.
What I mean to state is that I see my only choice is to look to like minded other parties who wish to consider legal action to get true value. I simply do not see how I could become a Nord Shareholder for the reasons stated above.
I will not dwell further on the tactics I have issues which, suffice it to say, retail shareholders have little faith that Nord's actions will change under the FULL control of Nord Gold. For this reason, under no circumstance will I tender my shares at $1.40, $2.40 or $ 3.40.
What would it take to change my mind? First off, I suggest withdrawing the offer. This provides time to prove to HRG minorities that Nord is a trustworthy partner. This means getting on a plane to Toronto and meeting shareholders. It means having conference calls with HRG where they are not close to the North Pole. It means marketing HRG's true potential and value to the marketplace, and it means getting HRG's share value to at least 85% of peer valuation.
Then and only then should Nord find supportive shareholders willing to ride Nord up - because we can trust your actions.
There are many great companies in which to double share prices. Home builders in the USA are up 200-300% this year alone. Great opportunities are in the hundreds each day. Wise investors simply will not wish to ride the coattails of a firm they do not trust, and in my personal case, I feel I am better off looking for a legal battle which I believe is winnable, rather than an unknown future based on what I see as not trustworthy.
Simply put - you have your work cut out for you - but I will not tender my shares. I am better off as a minority - because I can fight for true value from the inside of HRG, rather than the inside of Nord.
I will offer you this opportunity to change my mind. I will accept a request for a conference call or a meeting from you personally so we can discuss why I should consider Nord shares and some point in the future. It's not about informing me of great asset potential. It is about what Nord will do to demonstrate new approaches to minorities. I cannot be a minority in a firm I cannot trust.
I will await a reply.
Sincerely
Steve Hulaj