MGX Minerals Inc MGXMF

RE:Concerned Shareholders Requisition Annual General Meeting

[aIIenjames]

aIIenjames wrote:

CALGARY, Alberta, March 09, 2020 (GLOBE NEWSWIRE) -- A group of MGX Minerals Inc. (CSE: XMG) (FKT:1MG) (OTC Pink: MGXMF) (“MGX Minerals” or the “Company”) shareholders (the “Concerned Shareholders”), together owning not less than 5% of the issued and outstanding shares of MGX Minerals, announces they have requisitioned an annual general meeting of shareholders of MGX Minerals for the purpose of replacing the board of directors of the Company (the “Board”) with a new board capable of ensuring the proper stewardship of the Company. The full text of the requisition is included in this press release as Schedule “A”.

Among the principal reasons for this action are:

• Destroyed Shareholder Value. The Concerned Shareholders believe that the Board and management of MGX Minerals have destroyed considerable shareholder value and continue to operate the Company without a clear strategy focused on maximizing shareholder returns. After a period of prolonged value destruction, the Board has shown an inability to reverse continued poor performance nor stop MGX Minerals’ share price freefall. This is evidenced by the decline of the Company’s share price from its high of CDN$2.00 in January 2017 to CDN$0.085 as of March 6, 2020, representing a decrease of 95.75%.
   
• Dysfunctional Board and Entrenchment. The Concerned Shareholders are frustrated by the ineffectiveness of the Board in advancing the Company’s goals. Rather than focusing on significant issues facing the Company, the Board has been distracted by litigation initiated by two of the directors over the actions of MGX Minerals’ CEO, Jared Lazerson, who has misspent Company funds on defending this litigation for the purposes of self-entrenchment.This public infighting and loss of confidence in management has diverted funds and attention from the Company’s business, and must be put to an end before further value is lost.
   
• Potential Misuse of Company Funds and Inadequate Reporting Practices. The Concerned Shareholders have questions regarding the use of Company funds for apparent personal expenses and improper reporting of spending by management and in particular, Mr. Lazerson. This includes the hiring of a personal bodyguard and driver by Mr. Lazerson at a cost of CDN$1,600,000 to the Company. The failure to properly account for expenses, and the use of Company funds in such a manner, does not appear to be in the best interest of the Company or its shareholders.
   
• Failure to Maintain Lithium Technology License, a Critical Asset to the Company. Management of the Company failed to perform its responsibilities under the technology license agreement with PurLucid Treatment Solutions Inc. (“PurLucid”), pursuant to which PurLucid had granted the Company an exclusive license to use its lithium extraction technology. PurLucid informed management of its default under the agreement and the license has been revoked.
   
• Damaged Business Relationships. Due to financial mismanagement, MGX Minerals now faces several legal actions and claims for payment from previous project partners. These include clients in lithium rich zones of South America, the United States, and Canada.
   
• Ineffective Shareholder Communication. The Board and management’s poor communication practices and lack of shareholder disclosure is detrimental to minority shareholders and needs to be corrected.
   
• Potential Dilutive Transactions. The Concerned Shareholders are worried that potential transactions conducted by MGX Minerals in the near future could be highly dilutive and at a material discount to the current share price to the detriment of all shareholders.
   
• Failure to Address Concerned Shareholder Issues. The Concerned Shareholders have tried to engage with management to resolve these issues, but have largely been ignored to date.

Recognizing the above mismanagement, self-interest, entrenchment, and ineffectiveness of the Board, management and in particular, MGX Minerals' CEO, Jared Lazerson, the Concerned Shareholders seek the removal of all current Board members and the nomination of the following individuals (the “Nominees”) to the Board: