RE: RE: Justified ? The print below was taken from the booklet given to Sulliden shareholder's for the meeting taking place this Friday.
On August 28, 2012, the Board, on the recommendation of the Compensation Committee, approved a milestone based bonus plan consisting of cash bonus amounts to be held as a pool and distributed to individuals at the discretion of the Board throughout the next three financial years. Achievement of each of the established milestones will represent significant progress towards the Corporation’s goal of commercial gold and silver production from its Shahuindo Gold/Silver Project. The Board designed the milestone based plan with a view to using bonus payments to motivate and reward management, employees, consultants and directors to achieve each milestone expeditiously. The Board believes that this milestone bonus plan provides medium term incentive to the management of the Company. Importantly, the Board also believes that the milestone bonus plan closely aligns the interests of management with the interests of other stakeholders in the Corporation, including shareholders, as the achievement of milestones should result in an increase in the trading price of the Corporation’s shares and also a payment under the milestone bonus plan. The new milestone bonus plan comprises the following amounts and achievements:
Milestone
Aggregate Bonus Payment
Increased in Mineral Resource Estimates
$150,000 allocation for every 100,000 ounce increase in ounces of gold in the measured and indicated mineral resource categories (oxide or sulphide) from the baseline measured and indicated mineral resource estimate in the Corporation’s 2009 technical report (890,000 ounces)*
Additional $100,000 allocation for every 100,000 ounce increase in ounces of gold in the inferred mineral resource category (oxide or sulphide) from the baseline 2009 inferred mineral resource estimate (290,000 ounces)*
Positive Economic Results of Definitive Feasibility Study (“DFS”)
DFS with Internal Rate of Return (‘IRR”) of 15% to 20%
$1,000,000
IRR 20% to 25% : +$ 500,000
IRR 25% to 30%: +$ 600,000
IRR 30% to 35% : +$ 700,000
IRR 35% to 40% : ÷$ 800,000
IRR 40% to 45% : +$ goo,00o
IRR 45% to 50% : +$1 ,000,000
IRR 50% to 55%: ÷$1,100,000
Completion of the Environmental Impact Assessment (“Elk’)
$2,000,000 bonus allocation for submission of the EIA; additional $2,000,000 bonus allocation for approval of the EtA
Completion of all required Land Purchases
$3,000,000
Completion of Electrical Connection Agreement
$2,000,000
Start of Project Construction
$3,000,000
First Gold Pour
$1,000,000
Declaration of Commercial Production
$3,000,000
Share Price Appreciation
Discretionary bonus to be determined by the Compensation Committee and the Board.
*Additional technical information, including, but not limited to, exploration information, data verification, quality control procedures and mineral resource estimation is found in the corporation’s technical report entitled “Shahuindo Gold Project, cajabamba Province, Peru, NI 43-10 1 Technical Report on Preliminary Assessment”, effectively dated December 8, 2009, as revised February 16, 2010 (the “2009 Report”). The baseline mineral resource estimates from the 2009 report are used for purposes of determining a base for bonus allocations only and the 2009 Report is not a ‘current technical report’ on the Shahuindo Gold/Silver Project. For the current technical report on the Shahuindo Gold/Silver Project, please see the technical report entitled “Amended Technical Report on the Shahuindo Project, cajabamba, Peru” effectively dated May 1, 2011, as amended November 17, 2011. Stephane Amireault, P.Eng., the Vice-President of Exploration for Sulliden is a “Qualified Person” as defined by National Instrument 43-101 and has read and approved the technical and scientific information in this circular.