Just following up on my previous advice post of yesterday, having given things more thought, here are some of my observations.
First of all I checked you out a little. Your place of business, where you live, stuff like that. One of my buddies said he would hack into your email if I wanted him to , then we could find out more, but I told him to hold off on that. And I want to tell you that I don't wish you any harm, but if a disgruntled Core shareholder did, someone who has lost his dreams because of the Core BOD4, (and all of us have lost some of our dreams, because there is zero chance of this now turning out anything like we thought it very well might have if you guys hadn't brought Titan in), then you would be a very easy target.
But you don't seem like a bad guy. And this does seem like your first time in your business career that you are venturing into the dark side, what many of us think is criminal stuff. Sure your toll mill attempt in Peru quite a long while ago failed. But it looks like you did all you could to protect your shareholders, and there was nothing untoward done. Just bad luck, mismanagement, misrepresentation, bad timing , or some combination of . The usual.
Actually, all in all you look more like a Keith Piggott kind of guy than a Greg Sedun type.
So yesterday I told you what collusion might cost you. And maybe you just dismissed that possibility because all the smoking guns have been very carefully buried. But you cannot dismiss 'LACK OF PERFORMING YOUR FIDUCIARY DUTY AS A BOARD MEMBER OF A LISTED COMPANY'.
Directors have fiduciary duties of loyalty and care to the company and its stockholders. Duty of loyalty. You must put the interests of the company and its stockholders over your own personal interests in making decisions for the Company and evaluating opportunities.
Everyone has their own opinion on how Core BOD4 has failed to protect the shareholders of Core. I will give you one small example of how Core BOD4, and you personally, have failed in their FIDUCIARY DUTIES. And it comes from the Supplementary Directors Circular of Jan 3, 2020, and specifically from the ,so called, Fairness Opinion that Core hired Fort Capital to do.
I was curious when I read that opinion, that it sounded exactly like the one that PI Financial did for Core as part of the Merger attempt. So I looked at the Management Information Circular of May 10, 2019 where PI reported, and it contained all the same wording, the same disclaimers, and they both used the exact same methodology, which simply put ,was to just look at what Titan had put into it's Presentations, Financial Reports, etc. , with absolutely no attempt made to verify any of it, even with Titan's proven history of fabricating most everything they have ever reported.
And both PI and Fort Cap. both concluded that yes it is fair. But there is one big difference and that is that Fort Cap. did give some numbers, in an attempt to justify their conclusions. PI gave nothing, only a conclusion. So there is something to work with here.
Fort Cap. , and this they seemed to do on their own, gave values of US $29 m to the Vista Mill, and values of US $1,1,and 7 to Titan's so called properties: Coriorcco, Las Antas, and Torrecillas respectively. Titan owns exactly 0% of Coriorcco and Las Antas, but have 'deals' that they could 'own' them if they were to 'buy' them. And I think Torrecillas is worthless and has very little exploration potential to increase that valuation, and VERY INTERESTINGLY, there is no mention of Torrecillas in the 17 Dec, 2019 Titan Presentation. Torrecillas has always been very prominent in Titan's claims about it's assets, so for sure this was not an oversight. Where they unable to make the lease payments, did they actually not 'own' it at all, did the gov. of Peru take it? If Fort Cap. wasn't a sham , just like PI was, one would think they would have caught that and addressed that. How could they , using Titan supplied info" Presentations etc. as the basis of their findings, give Torrecillas a significant value when Titan in their most up to date Presentation no longer claims to own it?
And then the US $ 29 m value given to Vista. What do you think the Vista Mill is worth Mr. Clough? With your experience running a Toll Mill in Peru, running it into the ground for sure, but that would make you very aware of just how hard it is to profitably run a Toll Mill in Peru. And don't you think it would be you FIDUCIARY DUTY to the management and shareholders of Core to give your opinion as to the Vista value, given your unique position as a former Toll Mill operator in Peru? Well, I guess you know what I think.
And what I think is the true value of the Vista? Well, actually I think it is zero. I doubt it is presently in production, I think the Gov. of Peru will or has shut it down for permit violations, and I think their is a good chance the Gov. of Peru will seize it as a very small recovery of all the liabilities Titan is leaving in Peru, when Titan ,no doubt, shortly , abandons Peru all together. But let's look on the bright side as well.
Now I know you are quite familiar with Dynacor Corp. A successful, for decades, Toll Mill operator in Peru. A Canadian TSX listed Co. Maybe you even used Dynacor as a model for what you hoped to do in Peru. Anyway, as I said Dynacor is a toll operator, at present they acquire all the ore for their 300 tpd (expandable to 600) mill from small artisanal miners, that over a long period of time they have built relationships with. If Titan is operating at present they would also be getting ore from local artisanals. Titan's properties wont supply any ore for quite some time and quite some $ millions. As you know, Dynacor is the best: great supply deals with the local artisanals, great community relations, highly skilled operators from decades of experience, a new mill, etc. In 2018, the last full reported year, Dynacor produced 90,000 oz of gold from it's toll mill. This was viewed as a good result. And their net income from that was in 2018 US $ 4.5 m. As you are so very much aware, the margin on toll mills is very slim. The artisanals drive hard and aggressive bargains, and if you don't have your own ore, they are your only source. But Dynacor is very well managed , and with that $4.5 m they could pay a dividend that yielded $3.4%, and even buy back shares. And sure their market cap is pretty low to give such a good yield on the dividend; actually it is about the same as Titan's. I was curious why Fort Cap. wouldn't compare Titan to Dynacor in their Fairness thing, but then we all know that they were hired to deliver anything but a honest opinion. So this is what Dynacor has been able to do. By a very wide margin, the best in the class, with years and years of experience. And Titan has more or less the same market cap, while being by many standards the worst in the class, again by a wide margin, and no experience at ever running any type of successful toll mil in Peru. Maybe you could say we learn from our mistakes, and that is all Titan ever makes, but the learning doesn't seem to have happened yet.
Fort Cap . did say that if all things went smoothly, the Vista could produce between 20 and 25 thousand oz au annually. Staying on the bright side, let's say that Titan could produce that 20 to 25 as profitably as Dynacor. That would then give them, net income ,using the Dynacor metrics (20 or 25 divided by 90 x US $ 4.5m) , of annually US $1 to 1.25 m. I can see why most all Toll Mills in Peru ,including yours, don't last long. Now something that makes net $1 or 1.25 m a year in a company with many other assets to spread the cost of the listing, office expenses etc. would be worth something. But when it is the only asset a company has, and that company has since it started in late 2017 been spending around A $ 2 m a qtr. on listing fees etc. than it would be safe to assume that company wont be long solvent without taking on debt or equity financing. And I think that Vista making US $1 or 1.25 m a year net is a very rosy prediction. What do you think with all your knowledge and experience in this Mr. Clough?
The entire basis of Fort Cap saying this new deal is fair is based on Titan having a share price of 17 cents A. Everyone knows that share price is manipulated, but what Core BOD4, Titan , and now Fort Cap. say to justify the market cap that share price gives Titan, is the value of Titan's assets. Vista Mill US $ 29 m, Fort Cap says is their opinion. Don't really say how they came up with that. But to get to the 17 cents a share market cap that is what is needed. So if it is shown that the Vista Mill is in fact worthless, or worth much less, than this new deal of Titan's goes up in smoke (like most of Australia is presently doing- sorry couldn't help but add that). And if they don't own Torrecillas any longer, or if the other two properties they don't own are given fair value, than we get even more smoke.
And Mr. Clough, you know that I am 100% correct, with maybe a few small details needing some work. And you are the best placed to know that. I think I am reevaluating my opinion that you are maybe a nice guy, being led astray by the evil Reyes, and Sedun. I think Reyes and Sedun could be considered 'criminally insane' They are being driven by forces that I am sure they can't control. Doesn't mean they aren't responsible for their actions (I think other 'insane' persons like pedophiles, mass murders, rapists, etc. should be fully punished or at least locked away so their evil ways are stopped. But their insanity does explain how a human could do such atrocious things) . I do think it is probably like that with Reyes and Sedun, tho a little less drastic than mass murder say. We all go 'insane' at various times. Usually there is someone ,like your wife, who brings you back. But you Mr. Clough, and Bailey, can't plead the insanity plea. And you have just as much FIDUCIARY DUTY as anyone involved. When you signed up to receive that ,what is it, $ 25 thou a year to be a Core director , that is the legal commitment you made: to protect the interests of the Core shareholders, every last one of them. And by not alerting everyone, with your hard earned experience as a toll mill operator, that Vista Mill is much more likely worth at best the US $ 3.5 m it cost to build, you have failed in that duty. Ditto Bailey. And by signing off on the last Circular that contained Fort Caps. nonsense, you have said to the world that you found no problem with it. Shame on you.
And of course this gross violation of your FIDUCIARY DUTY, gives you great legal jeopardy. Sam Wong is a lot smarter than you. I am too lazy to go back and check, but I would bet that Sam didn't sign off on that Circular, or anything else the Core BOD4 is putting out. He also knows that his time left with Core is very short, and has probably already packed up his pencils and such.
So Mr. Clough, and Bailey, I am hereby putting you on notice that I intend to pursue legal action against you. I figure it would be futile to go after Reyes, or Sedun as both will probably flee the country no matter what way this goes. Reyes has I would guess figured out that Canada isn't the friendliest place for him already and could very well never come here again ( and he is right to think that and smart to stay out). Ditto Sedun. And my damage claim is $ C One Million. And that is based on the fact that many of us thought in early 2019 that Core could easily become a C $300 m company, and with 150 m shares that would have been 2 bucks a share. Mr. Piggott figured Core could eventually be a C $ billion company. I wont go into why the C $ 300 m is totally reasonable, I will save that for court. And I am basing my one million loss on getting out of here now with my remaining shares at 50 cents. And that wont be by tendering to Titan's 51 cent offer. What a joke we all know that is. It would be if with the regulators help Core can fend off the stupidness of Titan, and be returned to some kind of normalcy. But now that Core has been so completely messed up by the Core BOD4 we are never going to get to that previous quite possible 2 bucks. And no matter what happens I will never trust Core, or any small company like it, ever again. And will get out as soon as that is possible with something a little more reasonable than the present 23.5 cents.
And the legal action? I am sure you are curious Mr. Clough, and Bailey. It will be small claims court. And I am totally serious, as you will find out in the next few months. Now I know the limit is C $ 30 thou in BC and since I have lost a million that's a lot of money to leave on the table. It is. The problem is I don't have the money to go after you in big court. And a class action? The problem there is the only possible way that could work is if the action went against Core and it's liability insurance. I have no idea what the limit is on that insurance. A class action of a couple hundred million would be reasonable. I would think the limit on your insurance much less than that. If the action went after the directors personally, Sedun has no money and would be bankrupt before the ink dried on the writ, and Reyes would be never to be seen again in Canada. So that leaves you and Bailey. If you didn't just go bankrupt what could we get, A few hundreds of thousand would be my guess, and it would be hard to collect even that. And I doubt that any law firm would be interested in going after Core's insurance (going after Core would be a joke of course) , on contingency. This is just way to messy. Just looking over things again, I estimate that the total number of words written about this by Core and Titan in this past 12 months is in the billions. I just added a few thousand. And the class action should also be against Titan, in Australia, and the more I read about Australia the more I see how corrupt it is as a country. So yeah messy. And my experience with a class action, with a company I held, was that the lawyers who went after the insurance, on contingency, in a class action, issued pages and pages of paper and in the end just settled with the insurance company without going to court ,and the settlement paid them for everything they wanted, and the shareholders for whom the action was suppose to be for got basically nothing- pretty much the same as Titan investors have always gotten. And their is no way the shareholders could raise the money needed to fund a class on their own. If it was against the insurance, the insurance co would defend vigorously, and make it very costly. If it was against the directors personally , it could probably be won, but there would be nothing to collect.
So see you in court Mr. Clough. And Bailey. I already have most of my case flushed out, as per the above. Needs alot of detailing of course. And I am hoping what is going to happen with the regulators in the next little while will bolster my case. And it will proceed regardless of how things turn out here. My losses will always be losses. And I might talk to someones who have more legal knowledge than I do, but will represent myself in court. My resources are quite limited now that I have lost so much of what I should have made with my Core Investment. And right now I think you, Mr. Clough, played an outsized roll in that.