In March 2020, Mayfair entered into an settlement to accumulate the Fenn-Gib gold challenge within the Timmins area of Ontario. In August 2020, the Board of Administrators of Mayfair (the ” Board “), comprised of Henry Heeney and Sean Pi, the 2 founders and promoters, approached Patrick Evans to supply him the place of President and CEO of the Firm. On acceptance of the place, Mr. Evans approached a retired senior geologist, Howard Chook, to supply him the place of Vice President, Exploration. Mr. Chook, in flip, approached one other retired senior geologist, Paul Degagne, to supply him the place of Supervisor, Exploration. Messrs. Chook and Degagne had been persuaded to come back out of retirement on the understanding that they might be becoming a member of a powerful administration staff led by Patrick Evans, and an organization that might have a various and skilled Board.
In and round February 2024, administration of Mayfair expressed to Patrick Evans, the Chief Govt Officer of the Firm (the ” CEO “) and members of the Compensation Committee of the Firm (the ” Compensation Committee “) that they had been involved {that a} change of management might happen in respect of the Firm. This concern was primarily based on a number of components, together with:
- conversations between administration and Darren McLean, a marketing consultant of Muddy Waters Capital LLC (” Muddy Waters “) by which feedback had been made concerning November 2023 inventory choice grants;
- proposals made by Henry Heeney, a co-founder, former director and insider of the Firm to appoint to the Board:
- Kyle McLean, the brother of Darren McLean. Kyle McLean can also be an funding advisor at Haywood Securities Inc. (” Haywood “), who’s the custodian of sure funds directed by Muddy Waters; and
- Mr. Heeney himself,
(collectively, the ” Heeney Nominations “) pursuant to the board nomination rights settlement between the Firm and 1191123 B.C. Ltd. (a company managed by Mr. Heeney) dated March 4, 2020 (the ” Heeney Nomination Settlement “);
- Mr. Heeney’s request that the Firm have weekly conferences with Kyle McLean, who was not a director or worker of the Firm;
- a proposal made by Kyle McLean that Paul Harbridge, the previous CEO of GT Gold Corp. which was additionally the topic to a proxy contest involving Muddy Waters, be nominated to the Board; and
- Sean Pi’s actions as chairman of the Governance Committee to assist the Heeney Nominations.
Kyle McLean has no earlier expertise managing a mining firm or serving as a director of a public firm. Henry Heeney additionally has no earlier expertise serving as a director of a public firm. The Firm’s administration and staff had been additionally involved concerning the potential nomination of different or extra administrators who may very well be unqualified underneath the Heeney Nomination Settlement and the board nomination rights settlement between the Firm and 1249495 B.C. Ltd. (a company managed by Sean Pi, a former founder and director of the Firm) dated March 4, 2020.
Administration and the staff expressed issues to the Board that they didn’t want to be able the place they might be pressured to work underneath the management of an inexperienced or unqualified board and requested that the “change of management” provisions of their respective employment agreements be up to date to handle situations involving shareholders working collectively to impact management of the Firm, and cases the place the present board members had been both changed or not constituted a majority of the Board.
Administration and the staff requested that the next language be inserted into the definition of “Change of Management” (the ” Change of Management Provisions “):
“A Change of Management happens following the sale of all or considerably all the belongings of the Company; by or into one other company, entity or particular person; the acquisition by any Particular person or Individuals appearing collectively of ample voting rights to have an effect on the management of the Company; any change in possession of fifty p.c (50%) or extra of the voting capital inventory of the Company; or a change within the composition of the Board that leads to the present administrators of the Board constituting lower than a majority members of the Board”.
Given the actions by Darren McLean, Henry Heeney, Kyle McLean and Sean Pi famous above, Mr. Evans and members of the Compensation Committee took administration’s issues severely
It’s the view of the Compensation Committee that the continuity of the administration staff is essential to the continued success of the Firm. Mr. Evans and the Compensation Committee had been involved that, with out acceptable change of management provisions of their employment agreements, there may very well be departures by members of administration or senior staff. Mr. Evans and the Compensation Committee additionally had been involved that such departures may have a right away hostile affect on the Firm and its operations, hostile impacts on the Firm’s necessary relationships with First Nations, distributors, and different stakeholder teams.
The Firm’s monitor file of robust monetary efficiency and continued constructive improvement of the Fenn-Gib Undertaking is essentially attributable to the power of the administration staff. The Firm’s latest achievements have been acknowledged by traders, leading to strong returns for our shareholders. Together with, for instance: 1
- Superior share worth efficiency. Over the previous 12 months, the Firm is among the many top-performing gold shares amongst Canadian gold mining exploration and improvement firms. The Firm’s share worth is up roughly 27%, in comparison with the common of its peer group that are down roughly 19%. Notably the Firm’s share worth has outperformed the rise within the worth of gold, which solely noticed a 17% improve throughout the identical time interval.
- Premier valuation. The Firm has a worth to internet asset worth a number of of 0.56 which far exceeds its peer group common of 0.26. Equally, on an enterprise worth per ounce foundation, the frequent shares of the Firm (” Frequent Shares “) commerce at $72 per ounce which is effectively above the peer group common of $39 per ounce.
- Entry to capital and share worth resilience. The Firm has been profitable in accessing fairness capital to fund the event of the Fenn-Gib Undertaking, elevating internet proceeds of $23.4 million in 2023. On the closing share worth as of the date of the Round of $2.44, the Frequent Shares are buying and selling above the Frequent Share difficulty worth of $2.10 (November 11, 2023 personal placement) and $1.75 (June 8, 2023 personal placement).
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1 The share worth knowledge included on this information launch for the Firm and its peer group relies on the data supplied within the Round.
Accordingly, the members of the Compensation Committee decided that the requests of administration had been affordable, and that it might be in the perfect pursuits of Mayfair to incorporate the amended change of management language of their employment agreements.
Between February 5, 2024 and February 27, 2024, the next administration personnel and staff executed amended variations of their respective employment agreements, efficient January 1, 2024, which mirrored annual wage will increase and had the impact of adopting the Change of Management Provisions, or amending the beforehand included definition of “change of management” included of their respective employment agreements to align with the Change of Management Provisions:
- Howard Chook, Vice President, Exploration;
- Justin Byrd (via Aurous Consulting LLC), Chief Monetary Officer;
- Matthew Evans, Vice President, Company Affairs;
- Wallace Smith, Senior Geologist;
- Paul Degagne, Exploration Supervisor on the Fenn-Gib Undertaking;
- Alexandra Gelinas-Dechene, Senior Geologist;
- Ryan Hoefs, Senior Geologist; and
- Ian Chappell, Senior Geologist.
On or about March 5, 2024, the employment settlement for Mr. Evans, the CEO of the Firm, was amended to align the definition of “change of management” with the Change of Management Provisions. Beforehand, Mr. Evans’ employment settlement, entered into on August 12, 2020, negotiated with Henry Heeney and Sean Pi, had a broader definition for “change of management” than the Change of Management Provisions of the opposite administration personnel and staff. Accordingly, the amendments to Mr. Evans’ employment settlement served to slender the scope of circumstances the place a “change of management” would apply.
There have been no modifications or amendments to the Change of Management Provisions or another provisions of the related staff’ employment agreements relevant to a “change of management” following March 5, 2024.
Settlement Settlement
On or about April 19, 2024, the Firm acquired letter correspondence from Carson Block, a companion at Muddy Waters, stating that Muddy Waters and sure funding funds managed by it, had obtained assist agreements from shareholders comprising at the least 50.68% of the excellent voting share capital of Mayfair (the ” April 19 Letter “) in assist of Muddy Waters’ efforts to reconstitute the Board (the ” Reconstitution “). The April 19 Letter enclosed assist agreements (the ” Assist Agreements “) signed by Kyle McLean, William Smith, a dealer at Haywood, and Michael Simpson, an funding advisor at Haywood who each share a fee pool with Kyle McLean, Mireille Potentier (Michael Simpson’s partner), Henry Heeney, 1249487 B.C. Ltd. (a company managed by Henry Heeney’s mom), and 1249495 B.C. Ltd. (a company managed by Mr. Pi) (collectively, the ” Supporting Shareholders “). The Supporting Shareholders have in depth household, enterprise and monetary relationships with Muddy Waters or one another, over and above the Assist Agreements.
On or about Could 1, 2024, as a direct consequence of Muddy Waters’ repeated threats of litigation and calls for that the Firm not honour its employment contracts with its staff, Patrick Evans (CEO), Justin Byrd (CFO), Howard Chook (Vice President of Exploration) and sure different staff listed above (the ” Terminating Staff “) delivered notices (the ” Terminating Notices “) to the Board terminating their respective employment settlement. The Terminating Staff took the place that the actions of Muddy Waters and the Supporting Shareholders as detailed within the April 19 Letter and Assist Agreements constituted a change of management in accordance with the Change of Management Provisions within the respective employment agreements (the ” Change of Management Occasion “).
That very same day, Harry Pokrandt, the Chair of the Board, wrote to the Terminating Staff requesting they maintain their Terminating Notices in abeyance till the Firm may meet with them to debate an answer which might keep away from disruption to the Firm’s operations. The Terminating Staff agreed.
Over the following a number of days, counsel to the Firm and counsel to the Terminating Staff drew up phrases of a settlement settlement whereby the Terminating Staff agreed to carry in abeyance their Terminating Notices and proceed their employment with the Firm as much as the Assembly. The proposed settlement settlement included, amongst others, the next phrases:
- ” Belief Launch Situation ” means a change within the composition of the Board on the Assembly that leads to the present administrators constituting lower than a majority of the members of the Board;
- the Firm shall ship the mixture quantity of C$3,998,585, such quantity representing the mixture termination funds payable in respect of the Change of Management Occasion pursuant to the employment agreements right into a non-interest bearing belief account (the ” Change of Management Cost “);
- every Terminating Discover shall be held in abeyance, and shall don’t have any authorized impact upon their respective employment agreements, pending achievement of both:
- the Change of Management Cost being launched by the trustee to the staff of their respective parts instantly following the passing of a movement or collection of motions on the Assembly whereby the Belief Launch Situation is glad; or
- if the Belief Launch Situation just isn’t glad, following the election of the Board on the Assembly, every Terminating Worker shall instantly present written notification to the trustee and the Firm indicating if: (i) their Terminating Discover is to have speedy impact because of the Change of Management Occasion; or (ii) their Terminating Discover is to be rescinded with speedy impact,
- every Terminating Worker shall launch the Firm from any and all claims and proceedings of each nature and type by any means in reference to the Settlement Settlement.
The settlement settlement, efficient Could 6, 2024, was agreed to by the Terminating Staff and the Firm following a gathering of the Board held on Could 6, 2024 (the ” Settlement Settlement “).
The Board thought-about the next actions of Muddy Waters in gentle of the Terminating Staff place in respect of the Change of Management Occasion:
- Muddy Waters’ acquisition of shares on April 11, 2024, after it had entered right into a voting assist settlement with Henry Heeney;
- the connection between Muddy Waters and Henry Heeney, together with the voting assist settlement, would doubtless be considered by a court docket that these shareholders had been appearing collectively;
- Henry Heeney’s statements to Mr. Pokrandt that that he was a “worth taker” in respect of the Reconstitution and that Mr. Heeney needed to “go together with” something Muddy Waters proposed;
- the mixed Muddy Waters voting illustration with Mr. Heeney’s shareholding surpassed 20% of the voting rights and will have been ample to have an effect on management throughout the that means of the change of management provisions;
- the extra Assist Agreements supplied by Muddy Waters indicating in extra of fifty% of the Firm’s excellent voting capital; and
- Muddy Waters’ demand that the Board resign instantly and get replaced by Muddy Waters’ nominees.
The Board additionally obtained and regarded a reasoned authorized opinion from Borden Ladner Gervais LLP, its impartial counsel, in respect of the Terminating Notices and whether or not the Change of Management Occasion certified as a change of management pursuant to the Change of Management Provisions, dated Could 6, 2024.
The Board finally decided that there was some stage of threat that, regardless of the language of the Change of Management Provisions, the Change of Management Occasion might not qualify as a change of management underneath the Terminating Staff’ employment agreements.
Nevertheless, the Board decided {that a} change of management, as outlined within the Terminating Staff’ employment agreements, would happen if a majority of the present Board weren’t re-elected on the Assembly.
This left the Board with basically three choices to proceed:
- settle for the Terminating Notices and make the Change of Management Cost;
- dispute the Terminating Notices and refuse to make the Change of Management Cost; or
- come to an settlement with the Terminating Staff that might see them keep their positions till at the least the Assembly.
The Board thought-about the primary two choices to not be in the perfect pursuits of the Firm as every would contain the speedy departure of the Firm’s senior administration and plenty of of its key staff. For instance, if the Terminating Staff terminated their employment (no matter whether or not the Change of Management Cost was made), there can be:
- a right away hostile affect on the Firm, its operations, and its skill to adjust to ongoing disclosure obligations underneath securities legal guidelines and inventory alternate necessities;
- a possible hostile affect the Firm’s skill to recruit future staff;
- no skill to coordinate a easy transition to a brand new administration staff;
- shareholder issues, hostile impacts on the Firm’s share worth with no warning to the shareholders or the market, and no alternative for the Firm’s stakeholders to regulate their funding in gentle of a change to the administration staff ensuing from Muddy Waters’ actions; and
- hostile impacts on the Firm’s necessary relationships with First Nations, distributors, and different stakeholder teams, all of whom had already expressed severe issues over Muddy Waters’ actions; and
- the price of potential litigation with the Terminating Staff if the Terminating Notices had been disputed.
The Settlement Settlement, then again, retains senior administration and key staff via the Assembly, permits for a smoother transition of administration, supplies shareholders and the market with a chance to contemplate the modifications to administration ensuing from Muddy Waters’ actions, and permits the Firm a chance to take care of, and if vital, transition its relationships with First Nations, distributors, and different stakeholder teams.
Patrick Evans abstained from the Board’s vote on whether or not to simply accept the Settlement Settlement, given his curiosity within the Settlement Settlement. The opposite Board members voted unanimously in favour of the Settlement Settlement.
Proxy Contest
The Board advises shareholders to vote the WHITE Proxy or voting instruction type effectively upfront of the deadline at 2:00 p.m. (Pacific time) on June 3, 2024, in reference to the upcoming Assembly. Shareholders who’ve any questions referring to the Assembly or concerning the completion and supply of the WHITE Proxy or voting instruction type, might contact Alliance Advisors, LLC by phone at 844-858-7380 or electronic mail at Mayfair@allianceadvisors.com.
Further particulars referring to the issues to be voted upon on the Assembly and the Board’s suggestions are included within the Round, which is accessible on www.sedarplus.ca, in addition to the Investor Sources part of the Firm’s web site at https://mayfairgold.ca/investor-resources/.
Scientific and Technical Data
Scientific and technical data contained on this information launch has been derived, partly, from the Firm’s technical report titled ” Nationwide Instrument 43 101 Technical Report Fenn–Gib Undertaking, Ontario, Canada ” with an efficient date of April 6, 2023 and reviewed and authorised by Tim Maunula, an impartial “certified particular person” pursuant to Nationwide Instrument 43-101 – Requirements of Disclosure for Mineral Initiatives .
About Mayfair
Mayfair Gold is a Canadian mineral exploration firm targeted on advancing the 100% managed Fenn-Gib gold challenge within the Timmins area of Northern Ontario. The Fenn-Gib gold deposit is Mayfair’s flagship asset and at present hosts an up to date NI 43-101 useful resource estimate with an efficient date of April 6, 2023 with a complete Indicated Useful resource of 113.69M tonnes containing 3.38M ounces at a grade of 0.93 g/t Au and an Inferred Useful resource of 5.72M tonnes containing 0.16M ounces at a grade of 0.85 g/t Au at a 0.40 g/t Au cut-off grade. The Fenn-Gib deposit has a strike size of over 1.5km with widths ranging over 500m. The gold mineralized zones stay open at depth and alongside strike to the east and west. Lately accomplished metallurgical checks verify that the Fenn-Gib deposit can ship strong gold recoveries of as much as 94%.
ON BEHALF OF THE BOARD OF DIRECTORS
For additional data contact:
Patrick Evans, President and CEO
Telephone: (416) 670-5114
E mail: patrick@mayfairgold.ca
Internet: www.mayfairgold.ca
Media contact:
John Vincic, Oakstrom Advisors
Telephone: (647) 402-6375
E mail: john@oakstrom.com
For data on voting:
Alliance Advisors, LLC
Telephone: 1-844-858-7380
E mail: Mayfair@allianceadvisors.com
Ahead Wanting Statements
This information launch comprises forward-looking statements and forward-looking data throughout the that means of Canadian securities laws (collectively, ” forward-looking statements “) that relate to Mayfair’s present expectations and views of future occasions. Ahead-looking statements and will contain estimates, assumptions and uncertainties which may trigger precise outcomes or outcomes to vary materially from these expressed in such forward-looking statements. No assurance may be provided that these expectations will show to be appropriate and such forward-looking statements included on this information launch shouldn’t be unduly relied upon. These statements communicate solely as of the date of this information launch.
Ahead-looking statements are primarily based on various assumptions and are topic to various dangers and uncertainties, a lot of that are past Mayfair’s management, which may trigger precise outcomes and occasions to vary materially from these which are disclosed in or implied by such forward- trying statements. Mayfair undertakes no obligation to replace or revise any forward-looking statements, whether or not because of new data, future occasions or in any other case, besides as could also be required by regulation. New components emerge occasionally, and it isn’t doable for Mayfair to foretell all of them, or assess the affect of every such issue or the extent to which any issue, or mixture of things, might trigger outcomes to vary materially from these contained in any forward-looking assertion. Any forward-looking statements contained on this information launch are expressly certified of their entirety by this cautionary assertion.
Neither the TSX Enterprise Alternate nor its Regulation Companies Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Alternate) accepts accountability for the adequacy or accuracy of this information launch.
