RE:Breaking: Open Letter to Shareholders of Alexandria MineralsNP,
Bravo for breaking this news (just 7minutes afteter it was released).
Just a few general comments.
1. The firing was not at all a surprise. EO essentially asked for it. What would he expect the BoD to do when he fired off a letter early Friday (9 Feb 2018) with his intention to get rid of 3 out of 6 board member, including Gundy, the Chairman who has the support of more than one of the major shareholders (Eric S, and perhaps AEM, and others like Teck and IamGold). He claimed to have ~5% support from a group of concerned shareholders, but this percentage is nothing compared to more than 10% (including the wts) from ES (who could just spend another $3M to exercise the wts at 0.09 regardless of the SP just to get more control) and 8-9% from AEM, etc..
It was interesting to see that he left Priya Patil (she's on the Special Committee along with Henry and O'Connor and Henry and Patil have been buying shares during the past few weeks) on his proposed new board. Not sure if he asked for her agreement to put her name there. But it looked like she went along with the firing.
2. This Open Letter is expected: To provide some parting shots and for venting. BTW, any other dismissal, e.g. Vorvis and CFO, just to clear house? Not sure about the CFO, but Vorvis has not done much for the company. Corp Development and IR were a big mess (the website is a disgrace).
3. Misguided options from BoD: We have not heard much about the "misguided" options that the Special Committee was supposed to report to the full BoD scheduled forearly this week (today?). So what's EO was talking about?
4. First time we heard about EO game plan to raise money. Much of $20M sits in trusts, awaiting the BoD approval to close the financing? This is what I don't understand. Normally, you don't do that kind of thing in secret and by yourself. First, the CEO will need to get the BoD on side for this activity, because this is a major event (material stuff, big time, since he was talking about $20M which represent about 30% dilution of the company...the current Mkt Cap is $40M. So, 20/(40+ 20) = 33%.
Second, the company will need to advertise the fact that it wanted to go through with that scheme. It will need permission from the TSX-V, especially regulator's approval is required for FT share issue. Then when everything is lined up then the would be an announcement about closing a financing deal. Owens made it sound too easy and pointed the finger to the BoD a the bad guy. I am not a financial expert, but I have read enough to understand the basic stuff and how to deal with people, especially the bosses (when you want to get rid of them, you better be sure that you have lots of big people behind you, lol).
5. Release of new RE: The ball has been in his court for 8-9 years, since the last RE (2009). He had the mandate as the CEO to get the new RE done. There is no excuse. He did not have to "propose" that to the BoD.
6. He said also that he "propose to look for partners and M&A". That is not his job (he can certainly provide suggestions to the Special Committee). But, that was part of the mandate of the "Special Committee", as stated in the 20 Dec 2017 NR which was signed by Vorvis and Owens. So what was the complaint here?
In summary, I don't quite understand why Owens kept on digging the hole deeper. It would be better to negotiate a settllement and walk away to start a new company/life, than fighting a losing battle. I don't think he has too many supporters.
BTW, the golden parachutes are for cases where there is a change of control, i.e. the company is sold and some management staff would end up with no jobs. But. I am not sure about the cases where they are fired with cause (e.g. insubbordination).
Lastly, the BoD does not need to do anything drastic with AZX in the short term, like in a month or even two. Just appoint an Interim CEO, clean house a bit. The rest can come in due course with the first priority on the new RE for Orenada. Financing would not be required immediately. Ditto for M&A. May be a good offer for the orphan properties in Manitoba would help the SP (those 2 could fetch $MM if there are some eager buyers). Once we have a decent number for Orenada (e.g. 1+Moz) then the SP will improve further.
GH
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NextPhase wrote: https://www.newswire.ca/news-releases/an-open-letter-to-the-shareholders-of-alexandria-minerals-corporation-from-eric-owens-673958963.html