RE:Golden Predator sinkingYes, very lucky we dodged that bullet, or sinking ship.
We need to ask ourselves how we dodged it. How many of us even opened the information circular for the May 3 vote? The directors supported the transactions. We need to thank the requistioning shareholder group and re-read what they said in their May 19 news release and decide who has been truly acting in our best interests. The requistioning group suggested the current private placement can reduce our current holdings to less than half and is being done to 'entrench current management'. In addition, the group said that there were interested parties who were denied the opportunity to conduct due diligence - basically preventing any competing bids to GPY. Shouldn't we demand all interested parties get the opportunity to make their proposal? Wouldn't that be in all shareholders' best interests? Who wishes a sub-optimal outcome? Re-read the group's May 19 release (below) and watch for my future posts on how we can best protect shareholder's best interests together. Pat P.
SHAREHOLDERS OF VIVA GOLD CORPORATION REQUISITION SHAREHOLDER MEETING TO REMOVE AND REPLACE 4 BOARD MEMBERS
Humewood Ventures Corp. and 868854 B.C. Ltd. have, effective May 18, 2021, requisitioned a meeting of the shareholders of Viva Gold Corp., pursuant to Section 167(1) of the British Columbia Business Corporations Act, to remove James Hesketh, Edward Mahoney, Christopher Herald and David Whittle from the company's board of directors and replace them with Geoff Goodall, Jim Mustard and Gordon Keevil, all of whom are independent and highly regarded in the mining and financial communities. Humewood and the aforementioned numbered company are private British Columbia companies controlled by Robert Baker.
By way of background, shareholders of the company voted to reject a plan of arrangement proposed by management that would have resulted in Golden Predator Mining Corp. (GPY) gaining control of the company. The shareholders meeting where approval for this transaction was being sought was to have been held on May 3, 2021, and the cancellation of the meeting was announced on that date.
The driving force behind the GPY takeover was Mr. Hesketh, who has been a consultant to GPY since 2019 and was to become chief executive officer of the combined entity following the GPY takeover. Despite formally abstaining on voting for board approval of the GPY takeover, all negotiations on the company's behalf were carried out by Mr. Hesketh, and Humewood Ventures and 868854 B.C. believe that the other directors had little or no input on the terms of the proposed GPY takeover. Humewood Ventures and 868854 B.C. understand that a number of other interested parties expressed the desire to explore a similar transaction, but were denied the opportunity to complete normal due diligence under a confidentiality agreement, an opportunity that was provided to GPY. In short, Humewood Ventures and 868854 B.C. believe that the directors they seek to remove failed to engage in a fair process designed to maximize shareholder value and instead approved a transaction under which Mr. Hesketh would remain chief executive officer.
On May 3, 2021, immediately upon becoming aware of the cancellation of the shareholders meeting to approve the GPY takeover, the requisitionists' legal counsel communicated the requisitionists' intention to requisition a shareholders meeting to replace the current board to the company's legal counsel and requested that until board composition is determined at a meeting of shareholders, that the current management refrain from entering into transactions outside of the ordinary course of business, including any financings that would have the effect of entrenching current management. The requisitionists' legal counsel also advised that, pending the shareholder vote, the requisitions would arrange a financing on favourable terms.
Two days after being advised of the meeting requisition, Mr. Hesketh announced a private placement of 14.3 million shares and 14.3 million warrants at a per-unit price of 21 cents. The following day, Mr. Hesketh announced that the private placement would be increased to greater than 19 million shares and 19 million warrants.
Up to 46,438,095 shares are issuable under this private placement, or 118 per cent of the number of shares currently outstanding. The financing is being done at a price lower than the company's shares have traded in over a year (and then only briefly) and includes a full warrant. Current shareholders will hold fewer than 46 per cent of the company in which they currently own 100 per cent. The requisitionists believe that the primary purpose of this private placement is to entrench current management, that it is excessively dilutive and destructive to shareholder value, and that it should be cancelled, or, if it proceeds, it should be made subject to the approval of a majority of the company's current shareholders.
In summary, Humewood Ventures and 868854 B.C. seek a shareholders meeting to remove and replace management and certain other board members because of Mr. Hesketh's self-serving behaviour and the other board members' complete abdication of their duty to act in the company's best interest.
Humewood Ventures and 868854 B.C. are currently seeking to bring together a group of concerned shareholders to support their efforts and will report by way of news release in due course.