Catchy title is catchy (and semi-facetious), but even so I suppose it is obligatory that I thank the company for the latest NR, so thank you.
NR in question for reference:
https://www.coregoldinc.com/news-releases/2019/core-gold-corrects-self-serving-false-misleading-defamatory-and-inaccurate-disclosures-made-by-its-former-ceo/
The pissing match between Keith and the Board may be of interest to shareholders, but I don't really care about it that much - I'm going to focus on points relevant to the deal in the company NR as that is my interest.
#1 - Not relevant to the alternate deal / Keith vs Board of Directors pissing match. Regardless of either sides' intent, Keith's side is the one that is trying to increase value for shareholders through competition of offers. The Board is taking the opposide side of that equation.
#2 - The insinuation that Keith Piggott did this solely to retain his position as CEO is another pissing match between him and the Board and isn't relevant to the deal. However, the point does go on to say the deal was:
- non-binding: in point #5 the NR complains that Keith didn't even have the Board's authority to get a non-binding letter of intent, so how would the company expect him to bring a binding agreement? Fun times.
- highly conditional and required much further negotiation: the devils in the details. What are these conditions and what points remained to be negotiated? And if the company put the go-shop period into the original arrangement in good faith why is the Board spending its time amending out the go-shop clause out of the Titan deal, exorbitantly increasing the break fee and getting Titan to borrow money it doesn't have to suddenly match the PP offer by the alternate bidder (which conveniently happened immediatley _after_ the alternate bidder's letter of intent was presented to the board)... rather than negotiating directly with the alternate bidder to work through these "highly" conditional, outstanding issues? None of these actions are consistent with a good-faith "go shop" clause or a board of directors interested in bringing shareholders the best deal possible.
- not provide a value uplift: excuse me, I just snorted my drink through my nose laughing at this statement. I don't want to be flippant but I'll grant myself this exception because, as a Core Gold shareholder, I just can't look at that Vista Mill and say "I gotta get me some of that".
#3 - No funds have been received because the company is refusing to allow the alternate bidder the ability to conduct due diligence. No due diligence, no commitment. Obvious point is obvious.
#4 - Why would such a $14 million USD clause exist in the first place? Well I guess on one hand it could be because the company absolutely needs to get $14 million USD no matter which way it goes. I could buy that, but at what cost? Is there a dilution clause in there or is $14 million for 50% of the company better than $12 million for 20% of the company (as an example)? It seems much more like a clause intended to pre-empt smaller deals that would have been much less dilutive (or not dilutive at all) as alternatives to this highly dilutive Titan merger. For example, in one of his presentations, Keith Piggott talked about potentially selling some assets to raise needed money with zero dilution for shareholders... so a $14 million floor basically eliminates some of the very obvious options - such as selling the Zaruma mine - that potentially provides enough cash to cover short-term debts and reinforce the treasury. I suspect this is why this clause even exists.
#5 - In point #2 the company complains that Keith only brought them a non-binding deal. In this point (#5) the company complains he didn't even have the board's authority to get a non-binding letter of intent (much less a deal). I'm not just pointing this out to point out the contradiction - I'm pointing this out because this is indicative of the Board's motive. If they were being truthful about their reasons for supporting the Titan deal, there would be a single, clear narrative and rational for their opposition (even if it was misguided) and the company would be arguing one truth - not contradictory "truths" (hint: these are generally known as lies).
#6 - I don't see why the company's position is that a 3 drill rig exploration program is something "no company would authorize". It's great to make that statement, but the company conveniently left out why that's a problem. If someone is allegedly going to invest the amount of money at stake here, 3 drill rigs seems rather modest. I suspect the truth is that the Chinese bidder wanted to twin two holes to ink the up-front money part of the deal (as per Keith Piggott's NR) and the "3 drill rig exploration program" in the company NR was part of the due diligence required to option up their ownership of Dynasty Gold Fields and build the underground mine + mill from scratch. This meshes with both statements and seems like a reasonable condition from the alternate bidder - but I'm sure, if true, this is one of those "highly conditional" things the company mentioned (without detail or explanation) in point #2.
The rest is just more of the pissing match between Keith and the Board.
What's great about this helpful (at least for shareholders against the Titan merger) NR by the company is that it confirms there was a deal serious enough to warrant letters of intent by a bidder on very short notice. You can also tell the company rushed this NR out because it's super sloppy (my posts are definitely sloppy but I'm just a random shareholder, not a lawyer). The lawyers and whomever on the board/company probably went back and forth on each point in isolation, but completely failed to understand that when put together, these isolated points show a pattern of behaviour. This pattern is established through the company disclosing numerous clauses in the Titan deal that only have one possible motive (prevent other options from materializing) which is mutually exclusive with a good faith go-shop clause.
Then we have the inconsistent/circular arguments ("the offer Keith brought was not binding" -> "Keith didn't have authority to get a non-binding LOI", "the other bidder didn't commit any funds" -> "the deal we signed with Titan prevents due diligence", "the alternate bidder wanted to run an exploration program too large for any company to accept" -> "the deal we signed with Titan prevents anyone drilling on the properties", etc, etc ad nauseum) which as I noted earlier is usually not consistent with an argument borne of truth but of a desperate attempt to put as many points out as they can to try and discredit the alternate deal, which on paper, is so massively superior.
This established pattern of behaviour completely validates the idea that the go-shop period was always a farce and only put into the original agreement because Keith Piggott would otherwise dissent against the deal, thereby denying the company the ability to claim "unanimous approval by the board". Unanimous board approval was also very likely a condition of the Titan merger - I have seen such clauses in M&A contracts before, especially in deals where the acquiring party expects resistance because their offer is extremely weak.
Basically, every argument the company made against the alternate offer in the NR as well as their own, recent actions (as laid by the company in their own news releases) is consistent with a Board of Directors that is trying prevent an alternate deal, not a Board of Directors interested in finding the best deal possible for shareholders. That, in and of itself, is all you need to know about this latest NR by the company.
I'm more determined than ever to vote NO to the Titan deal to force the company to engage any and all comers who are interested in doing a deal (and now we know with certainty that you're out there, and serious).