WESDOME GOLD MINES ANNUAL GENERAL MEETING SHOULD BE POSTPONED
TORONTO, May 16, 2016 /CNW/ - Resolute Performance Fund ("Resolute"), an investment fund managed by Resolute Funds Limited, the largest shareholder of Wesdome Gold Mines Ltd. (TSX: WDO) ("Wesdome" or the "Corporation"), announced today that it has submitted a letter to the board of directors of Wesdome expressing significant concerns with respect to the operations and management of Wesdome. While there have been many operational and other issues at the Corporation since Resolute became a shareholder, Resolute is particularly concerned with:
- the fact that gold production dropped to 8,036 ounces in the first quarter of 2016 from 14,484 ounces in the third quarter of 2015;
- the significant increase in cash burn in the first quarter of 2016, as reflected by the decrease of $7.3 million in cash and cash equivalents, compared to a decrease of $0.362 million in the third quarter of 2015;
- the significant increase in the all-in sustaining costs per ounce on a production basis to $2,501 per ounce in the first quarter of 2016, compared to $1,368 per ounce in the third quarter of 2015; and
- the proposed increase in the size of the board of directors from five to eight members, which Resolute believes will simply increase overhead and other costs without leading to the necessary operational changes.
Resolute believes that the existing board and management of Wesdome has become dysfunctional and has no confidence in the majority of the director nominees. Resolute does not believe that the proposed board and existing management are capable of addressing the pressing issues at Eagle River. Resolute calls on the board of Wesdome to postpone the annual general meeting of shareholders (the "Meeting"), currently scheduled for May 17, 2016, to allow Resolute and the board to engage in constructive discussions aimed at reconstituting the composition of the board with suitable persons capable of successfully leading Wesdome out of its current difficulties. Resolute firmly believes that delaying the Meeting to facilitate these discussions is in the best interests of the Corporation, its shareholders and other stakeholders.
If Resolute's concerns are not adequately addressed, Resolute intends to withhold its vote from all director nominees, other than Nadine Miller and Rostislov Raykov, at the Meeting. Resolute is the holder of 33,350,000 common shares of Wesdome representing approximately 25.8% of the Corporation's outstanding common shares.
Resolute intends to engage in ongoing discussions with representatives of Wesdome concerning, among other things, changes to the Corporation's business and operations, its executive management and its board composition, and with respect to a strategic review of actions available to the Corporation to maximize shareholder value. In addition, Resolute may seek to initiate or participate in such other actions as it deems necessary to enhance shareholder value, including, without limitation, with respect to potential changes in the business, strategy or board composition of Wesdome. These actions may include seeking to add nominees designated by Resolute to Wesdome's board of directors, seeking to remove individuals from Wesdome's board of directors, requisitioning a meeting of shareholders of Wesdome and soliciting proxies in connection therewith, and making one or more shareholder proposals.
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 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.
Proxies for the Wesdome shareholders' meeting 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. Although it has not done so at this time, Resolute may engage the services of one or more agents and authorize other persons to assist it in 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 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.
SOURCE Resolute Funds Limited
For further information: Tom Stanley, President and Chief Investment Officer, Resolute Funds Limited, at (416) 350-3232 or email@example.com.