Shareholders getting fed up with the current board ..... Mr. Jon Perrett, concerned shareholder, reports
HAPPY CREEK MINERALS LTD. SHAREHOLDERS DEMAND REPLACEMENT OF THE ENTIRE CURRENT BOARD OF DIRECTORS
Jon Perrett, a concerned shareholder of Happy Creek Minerals Ltd. has proposed and nominated for election to the board of directors of the company four director candidates at the annual general meeting of shareholders of Happy Creek currently scheduled for July 28, 2020.
The Company is engaged in the exploration and development of mineral properties in British Columbia, Canada. The Company portfolio of several significant properties including the extensive copper property adjacent to Teck Resources Ltd. operations in the Highland Valley and the Fox tungsten deposit in the Cariboo.
Below is a statement of the Company's current state of affairs that offers an alternative plan moving forward with a strong new board of directors. Under the current management, all HPY shareholders have experienced a significant long term decline in shareholder value. A change is needed.
MANAGEMENT FAILURES:
Over the last several years, the current management has demonstrated that it does not have the skill set to:
- protect and enhance the Company's share price as one of the management's key priorities,
- seek out and negotiate appropriate partnering agreements to develop the Company's assets,
- operate the Company on corporate governance principles that one expects to be used in the running of a public corporation including:
- holding regular board meetings,
- keeping accurate minutes,
- adequately preparing for annual general meetings including providing a detailed president's report,
- neglecting to establish an investor relations component within the company; it was not until very recently (June 8, 2020) that the current management felt it necessary to move in this direction. How much have investors lost as a result of this neglect?
- not being open to alternative points of view in all these areas especially regarding corporate finance.
Furthermore, the current HPY management keeps entering the markets to raise funds exercising inappropriate strategies and at inappropriate times. The result has been an ongoing dilution of shareholder value and a decline of the share price. this despite the company's100% ownership of the Fox Project hosting high grade tungsten resources that are in the top 5 of the worlds known deposits. From mid 2017 to June 16, the Company's share price dropped from 22.5 to 7.5 cents, a decline of 66.7%. During this time, the Company issued approximately a total of 25,951,424 shares, resulting in dilution of 30.6%, By comparison, the market value of the Company was approximately $17,840,000 million in mid 2017 but was $8.48 million on June 16, 2020: a decline of 52.5%.
The company's attempt to advance the 100% owned, 200 square kilometre Rateria and West Valley copper property has been slow to invisible for the past several years. This property adjoins the operating Highland Valley Copper mine property, Canada's largest copper producer, where historic drilling has discovered and partially defined two new copper occurrence that are 6.5 km from a producing open pit. The project hosts a number of exploration targets, yet no meaningful work has been done on this property since August of 2017.
A COMPLETE CHANGE in the current HPY management is now needed to protect shareholder value, to reverse the negative long declining trend of the share price and to move the company forward in a positive way.
Former Happy Creek Minerals Ltd. Director Paul Berndt explains the reasons for his resignation from the HPY Board:
"Despite multiple attempts by advisors for the CEO to adopt or to even consider strategies to enhance HPY's value he has steadfastly refused to deviate from a minimalist approach to the Company's evolution and management. This has led to serious erosion of shareholder confidence as well as value."
Current Happy Creek Investor Gary Bennett: "I started investing in HPY in 2013 when it showed considerable promise because of its mineral holdings. Since that time, I have watched the value of my investment decline steadily, in my belief, because of poor corporate financing decisions made by the CEO and endorsed by the current board. Because the management repeatedly went to the market to raise funds without any public enunciation of a carefully conceived and articulated plan, the market response was weak, and the share price continued to decline. The management's repeated and ill-timed `drill and dilute' operational mindset and the current board's continued endorsement of this strategy has cost every shareholder considerable wealth. This strategy has diluted our collective share value; the company gave away too much equity at too low a price. More of the same in the future can be expected to be detrimental to all shareholders. It is my carefully considered opinion that the current management does not have the vision or the corporate finance capability to move this company forward. The initial promise of the company has not materialized. A total change in leadership is now needed if Happy Creek Minerals Ltd. is to live up to its potential and to protect and enhance shareholder value"
CONCLUSION
Shareholders have suffered a huge real and opportunity cost by investing in the Company with its current management. Potential new investor groups have indicated their reluctance to invest in HPY without a clearly-enunciated path towards an overall goal. The proposed new board has the experience and enthusiasm that is needed to get this company back on track.
PROPOSED NEW BOARD MEMBERS:
The Concerned Shareholder believes that the following director candidates (the "Proposed Nominees"), will add critical oversight of the Company's operations by the Board of Directors:
1. Paul Berndt - Mr. Berndt, a metallurgist and Fellow of the Australasian Institute of Mining and Metallurgy with 45 years mining industry experience, is currently Head of Technical Services at Raptor Capital. International, a BVI-registered metal streaming and royalty company based in Monaco, where his role is the assessment of mining projects.
Mr. Berndt previously served as a non-executive Director of HPY for 5 years until March 13, 2020, where he conducted ore processing investigations and studied development scenarios for the Fox tungsten project. Prior to and partly concurrent with that, he was General Manager of the Bodo tungsten mine in Brazil from March 2014 to January 2016, and before that the founding Managing Director of ASX-listed Tungsten Mining NL (ASX:TGN) between June 5, 2012 and June 10, 2014. From February 2008 to September 2011, he was managing director of Daytal Resources Spain S.L. where he managed their Los Santos tungsten mine.
2. William Espley Over forty years of public company and venture capital experience including:
Founder and President of Professional Canadian Investment Group (PROCAN); Vice President and Director of American Bullion Ltd. (TSE:ABP); Investor Relations of Net One UEPS Technologies Ltd., (NASDAQ); Director of Direct Communication Solutions Inc., (CSE:DCSI); Extensive background in shareholder relations, regulatory and corporate governance, venture capital, and corporate finance functions including plans of arrangement.
3. Stephen Fabian -Graduated with a B.E.(Min) from the University of NSW School of Mines and has over 25 years of experience in the resources sector working as a fund manager, mining analyst, founder and Chief Executive Officer of numerous mining ventures ranging from gold, diamonds. tungsten and iron ore sectors. Specialties include project analysis, mergers and acquisitions, project financing, project development and mining operation optimization.
He is currently CEO of Anglo Saxony Mines Ltd, which is developing a tin/indium project in Saxony, Germany and Chairman of Brazil Tungsten Holdings Limited. He is a founder and non-executive director of Tungsten West Limited, which is re-developing the large Hemerdon tungsten deposit in the UK. He is also an advisor to the Baker Steel Resources Trust (BSRT), a London Stock Exchange (LSE) listed resources fund focusing on earlier stage opportunities in the sector.
4. Jim Mustard, P.Eng. - Mr. Mustard is a seasoned capital markets and mining professional, bringing over 20 years of expertise in business and project development to the Company. He recently completed his tenure as the VP Corp. Development and Director with Explorex Resources Inc. He was VP of Investment Banking at PI Financial. Prior to that he was the President of Canada Zinc Metals and before that was VP and Senior Mining Analyst at Haywood Securities for 11 years. He has also worked for Barrick Gold, Eldorado Gold, Amax of Canada, Canada Tungsten Mining, the Government of Canada and Cyprus Anvil. Through his various tenures, he has reviewed hundreds of projects and companies and has accumulated extensive experience in exploration and development in North and South America. He is currently President of Goldblock Capital Inc, and a Director of Four Nines Gold Inc. and Zola Minerals Inc. (pvt).
In addition to a strong technical background, he has developed a considerable capital market and investment network. Jim is a registered Professional Engineer with the Association of Professional Engineers and Geoscientists of BC.
The Proposed Nominees represent:
- a highly experienced slate of directors who are focused on good governance, transparency and providing management with expert oversight;
- a group that has a strong alignment with the Company's Shareholders.
- a slate of directors with diverse and relevant skills and experience, who have a history of value creation and a commitment to focusing on the best interests of shareholders across multiple organizations and is the answer to unlocking long-term value for shareholders.
The Concerned Shareholder is confident that the shareholder mindset of the Proposed Nominees, combined with their technical expertise and experience as it relates to the Company's existing assets, is a formula for value creation and uniquely positions the Proposed Nominees to unlock the long-term value and opportunities that the Corporation's current assets contain.
THE NEW BOARD'S COMMITMENT TO OUR SHAREHOLDERS
- To bring enthusiasm, competence, and professionalism into the boardroom so that Happy Creek Minerals Ltd. can operate as an efficient and profitable public company.
- To develop a detailed strategic plan of arrangement that will include:
- creating a wholly owned subsidiary of Happy Creek Minerals Ltd. to develop the tungsten asset.
- This will allow separate corporate financing deals to be negotiated and tailored to the individual circumstances of the Fox tungsten property and the Highland Valley copper property.
- For the Tungsten Asset - Develop the asset itself by completing a pre- feasibility plan and updating our NI 43-101.
- For the Highland Valley Asset - The plan will be to put together a full data room, containing all of the relevant technical data that we have on the Highland Valley. The new management will then aggressively approach several of the world's major and mid-level copper producers with the intent of forming a joint venture to develop the property.
- This strategic plan will send a strong message to the market that the new leadership is focused on enhancing share value.
- To keep shareholders and the investing public fully informed by:
- maintaining a competent investor relations person or company to manage market information for current shareholders and the investing public. As mentioned above, it was only until very recently (June 8, 2020) that the current management felt it necessary to move in this direction. Shareholders have suffered as a result of this neglect?
- ensuring that the company website is kept current and is a valuable source of information;
- holding informative annual general meetings,
- preparing quarterly reports that will be posted on the website for shareholders,
- using regular press releases and bulletins on the website regarding corporate developments to keep everyone informed thus enhancing share value;
- making extensive use of all traditional and social media vehicles to get information about corporate initiatives out to shareholders, to investment advisors and to the investing public;
- preparing a presentation package for shareholders and investment advisors to use.
- To review and revise the corporate structure to improve efficiency and information flow to shareholders.
- The company will initiate pro-active consultations with the Indigenous people in the two project areas to outline the benefits of these developments to the First Nations and to ensure an orderly development to the projects.
- The company will support others in their efforts to change the law to curb the harmful affects of naked short selling on junior mining companies. Please go to (www.SaveCanadianMining.com) and watch the video to learn more.
Advance Notice Policy Compliance by the Concerned Shareholder:
Under the Company's Advance Notice Policy and Article 14.2(c) contained within the Company's Articles, to be timely, a nominating shareholder, in the case of an annual meeting of shareholders, must provide notice not less than 30 days or more than 60 days prior to date of the annual meeting. This news release constitutes timely notice.
The Board of Directors have been provided, with advance notice on June 22, 2020, a copy of this press release and all biographical disclosure information required by the Company's to be included with the Company's information circular. As a consequence, the Concerned Shareholder and the Proposed Nominees in the interests of saving the Company costs of paying costs from an expensive proxy dispute are not preparing and disseminating a dissident information circular and fully expect that (1) the Proposed Nominees shall be listed as nominees for election with the upcoming AGM's proxy instrument and (2) such biographical disclosure information shall be included with the accompanying information circular. A copy of the cover letter to the Board of Directors can be found under HPY's company profile on SEDAR at https://www.sedar.com.
The replacement of the current management with a new board, the corporate restructuring, the formation of an articulated, detailed strategic plan of arrangement, and our campaign against `shortsellers' collectively should have a very positive effect on the HPY share price as the investing public will have confidence that the new management and the new board have a clear direction of how to move forward.
SHAREHOLDER ACTION:
Your Vote Can Save Your Investment
The Concerned Shareholder's nominees to the Happy Creek board have a clear strategy and are committed to optimizing shareholder value. We urge you to stop its current management and instead engage a highly qualified, competent and trustworthy new Board of Directors.
Regardless of the number of Happy Creek shares that you own, you should take immediate action and cast your vote today or no later than 10:00 A.M. (Vancouver Time) on Friday, July 24, 2020 or at least 48 hours (excluding Saturdays, Sundays and statutory holidays) prior to the time of any adjournment or postponement of the Meeting.
Cease Trade Orders and Bankruptcies, Penalties and Sanctions
To the knowledge of the Concerned Shareholder, no Proposed Nominee is, as at the date hereof, or has been, within 10 years before the date hereof, a director, chief executive officer ("CEO") or chief financial officer ("CFO") of any company (including the Company) that was the subject, while the Proposed Nominee was acting in the capacity as director, CEO or CFO of such company, of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days or was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the Proposed Nominee ceased to be a director, CEO or CFO but which resulted from an event that occurred while the Proposed Nominee was acting in the capacity as director, CEO or CFO of such company; or is, as at the date hereof, or has been within 10 years before the date hereof, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or has, within the 10 years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.
To the knowledge of the Concerned Shareholder, no Proposed Nominee has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or has been subject to any penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.
Material Interest
Except as otherwise disclosed herein, to the knowledge of the Concerned Shareholder, neither the Concerned Shareholder, nor any of the Proposed Nominees or their respective associates or affiliates, has: (a) any material interest, direct or indirect, in any transaction since the commencement of the Company's most recently completed financial year or in any proposed transaction which has materially affected or will materially affect the Company or any of its subsidiaries; or (b) any material interest, direct or indirect, byway of beneficial ownership of securities or otherwise, in any matter currently known to be acted on at the Meeting , other than the election of directors.
We seek Safe Harbor.