Resolute Performance Fund, an investment fund managed by Resolute Funds Limited, the largest shareholder of Wesdome Gold Mines Ltd., today (May 27th, 2016) announces that Wesdome has refused to constructively engage with Resolute in discussions aimed at addressing the operational issues at Eagle River. In light of these ongoing operational issues and Wesdome’s refusal to constructively engage with Resolute to address the issues, Resolute has come to the conclusion that a sale of Wesdome is the best alternative now available to maximize shareholder value.
On May 16, 2016 Resolute delivered a letter to the Board of Wesdome (Wesdome-A), and issued a press release, expressing Resolute’s significant concerns with respect to the operations and management of Wesdome. Resolute called on the Board to postpone the annual general meeting, then scheduled for May 17, to a later date to allow for constructive discussions aimed at reconstituting the Board with suitable persons capable of successfully leading Wesdome out of its current difficulties.
In response, the Board of Wesdome announced the formation of a Special Committee and an unspecified delay to the shareholder meeting date, to not later than June 14, 2016. Resolute met with the Special Committee on May 19 and verbally presented a constructive proposal aimed at amicably resolving matters. Subsequently, on May 25, Wesdome delivered to Resolute a letter which failed to address any of the significant concerns raised by Resolute.
Resolute delivered a further letter to the Special Committee on May 26 (Wesdome-B) again seeking to establish a constructive dialogue aimed at better positioning Wesdome to address its operational issues at Eagle River. On May 27 Resolute had a meeting with one member of the Special Committee but received no further comfort on how Wesdome would address its current difficulties and was advised by the Special Committee member that Resolute and Wesdome were at an impasse.
With respect to the upcoming meeting of the shareholders of Wesdome, it is Resolute’s intention to vote as follows:
FOR the election of Nadine Miller, Rostislav Raykov, Barry Smith and Rowland Uloth; and
WITHHOLD on the election of Duncan Middlemiss, Don Njegovan, Charles Page and Bill Washington.
According to Wesdome’s management information circular dated April 1, 2016, the Board of Wesdome has adopted a majority voting policy which (a) provides that a director nominee who is elected at the shareholder meeting with a greater number of votes “withheld” than votes “for” will be considered by the Board not to have received the support of the shareholders and (b) requires any such nominee director to tender their resignation promptly following the meeting. Resolute calls on the members of the Board elected at the meeting by a majority of “for” votes to respect the wishes of their shareholders and immediately accept the resignations of all directors who are elected at the meeting with a greater number of votes “withheld” than votes “for”.
Resolute is the holder of 33,350,000 common shares of Wesdome representing approximately 25.8% of Wesdome’s outstanding common shares. Copies of Resolute’s May 16 and May 26 letters to Wesdome are attached as Schedule “A” and “B” to this press release.
About Resolute Performance Fund and Resolute Funds Limited
Resolute Funds Limited, a Toronto-based investment management firm, is the investment manager of the Resolute Performance Fund, the sole fund it manages. The Resolute Performance Fund is an open-end investment trust that was established on June 2, 2005. The objective of the Fund is to provide superior investment returns over the long term by investing primarily in Canadian equity securities with growth potential. Tom Stanley is the President and Chief Investment Officer of Resolute Funds Limited. Mr. Stanley previously managed the Resolute Growth Fund, a Canadian public mutual fund, from December 3, 1993 to June 2, 2006.
Information in Support of Public Broadcast Exemption
Resolute is not hereby seeking to be a proxyholder of any other shareholder at the upcoming shareholder meeting. Nonetheless, Resolute is relying on the exemption under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.
This solicitation is being made by Resolute, and not by or on behalf of the management of Wesdome.
The address of Wesdome is 8 King Street East, Suite 811, Toronto, Ontario, M5C 1B5.
If proxies are solicited for the Wesdome shareholders’ meeting, they may be solicited by mail, telephone, email or other electronic means as well as by newspaper or other media advertising, and in person by managers, directors, officers and employees of Resolute or its investment manager, who will not be specifically remunerated therefor. In addition, Resolute may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. Resolute has engaged the services of The Laurel Hill Advisory Group Company (“Laurel Hill”) to assist Resolute in an advisory role in connection with the meeting of shareholders of Wesdome, however, Laurel Hill will not be soliciting proxies on behalf of Resolute. All costs incurred for the solicitation will be borne by Resolute.
Shareholders of Wesdome have the power to revoke proxies previously given by them. Revocation of proxies for registered shareholders of Wesdome can be effected by an instrument in writing (which includes a proxy bearing a later date) signed by a shareholder or the shareholder’s attorney duly authorized in writing (in the case of a corporation, such instrument must be executed under its corporate seal or signed by a duly authorized officer or attorney for the corporation) which is either delivered to Computershare c/o Proxy Dept., at 100 University Avenue, 8th Floor Toronto, Ontario M5J 2Y1, Canada any time up to and including the close of business on the last business day preceding the day of the shareholder meeting, or any adjournment thereof, or deposited with the meeting Chair prior to the hour of commencement on the day of the meeting. A beneficial shareholder of Wesdome who has submitted a proxy may revoke it by contacting the intermediary through which the beneficial shareholder’s common shares are held and following the instructions of the intermediary respecting the revocation of proxies.
To the knowledge of Resolute, neither Resolute nor any of its managers, directors or officers, or any associates or affiliates of the foregoing has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted upon at the meeting of Wesdome shareholders other than the election of directors.