(Shares outstanding: 36,615,615)
TORONTO, Feb. 20 /CNW/ - Augen Capital Corp. (Augen Capital) (TSX-V: AUG)
announced today it has filed its Notice and Proxy Circular for the Special
Meeting of Shareholders of Augen Gold Corp. (Augen Gold) (TSX-V: AUJ), and is
mailing the circular to Augen Gold shareholders.
As a concerned shareholder, Augen Capital is acting on its right to
convene the Special Meeting of Augen Gold, since the Directors of Augen Gold
failed to respond to Augen Capital's December 18, 2008 requisition for such a
Augen Capital called the meeting because it believes the current Board of
Directors of Augen Gold must be restructured because it is not serving the
best interests of shareholders and is endangering the future of the Company.
Fellow shareholders are advised that the Meeting, originally scheduled
for March 10, 2009 will now be held on Friday, March 13, 2009 at 10 a.m.
(Toronto time) in the offices of Stikeman Elliott LLP (details below).
Augen Capital called the Special Meeting to: fix the number of directors
of Augen Gold at four; to replace two of the current Directors of Augen Gold
with nominees Augen Capital believes will serve shareholders more responsibly,
and: to approve a debt-to-shares conversion which would allow Augen Gold repay
the $1.1 million outstanding debt owed to Augen Capital on terms highly
favourable to Augen Gold shareholders while conserving Augen Gold's cash
The independent nominees who were originally proposed by Augen Capital
are A. Timothy Peterson and James Sbrolla. They have been joined by Louis J.
Sapi, who is replacing Tony Busseri on the slate.
Mr. Sapi is a significant shareholder of Augen Gold. He is a chartered
accountant who established his own practice as a sole proprietor in 1985, and
in January 2001 merged with, and became managing partner and Chief Executive
Officer of McWilliams Sapi Hinchcliffe, Chartered Accountants LLP, (now HS &
Partners LLP, Chartered Accountants). His experience includes serving as a
director and chair of the audit committee of Volcanic Metals Exploration, a
TSX listed company, from 2001 to 2006; an advisor to the board of directors of
Ocean Lake Industries, a TSX listed company, from 2002 to 2008; chairman of
the board of the Bluebird Group of Companies from 1998 to 2006; and Chief
Executive Officer of The Office Mover, a Toronto-based service company, from
2004 to present. Mr. Sapi is the founder and chairman of The Charger
Foundation, a charitable foundation with which he has been involved since
2001. He is currently a director of the Jane Goodall Institute of Canada, for
which he also serves as a member of the executive committee and chair of the
The Proxy Circular is accompanied by a letter to Augen Gold shareholders.
The full text of that letter follows:
Time for a Change
Special Meeting of the Shareholders of Augen Gold Corp.-March 13, 2009
February 17, 2009
Dear Fellow Shareholder of Augen Gold;
As a concerned shareholder, we believe change is urgently needed at the
Board of Directors of Augen Gold Corp. The Company is speeding towards a
financial precipice and two of its incumbent directors are doing nothing to
As the founding and largest registered shareholder of Augen Gold as well
as its largest lender, Augen Capital Corp. is asking for your help to make the
necessary changes at Augen Gold before it is too late. We have called a
special meeting of shareholders that will enable us to make that change
Augen Gold is rapidly running out of money.
The Company that you and we own, Augen Gold, has limited cash remaining
from its initial public offering. With the issuance of flow-through shares as
part of the IPO, it committed to spend more than $3.3 million on Canadian
Exploration Expense - CEE. As of September 30, 2008, Augen Gold had incurred
only about $493,700 of the CEE commitment and did not have enough cash on hand
to enable it to meet its flow-through obligations. Furthermore, Augen Gold has
borrowed more than $1.1 million from Augen Capital in the form of a demand
Augen Capital has confidence in the potential of Augen Gold - under the
direction of the right Board. Recognizing the need to retain cash in the
Company, Augen Capital spent more than six months in negotiations with the
Board of Augen Gold in an attempt to reach a solution that would allow the
Company to repay the demand loan through a Debt-to-Shares Conversion.
Throughout that period, and since, Augen Capital has been rebuffed or ignored
by two directors, Joseph Leeder and James Stephenson.
In our view, the Debt-to-Shares Conversion is both logical and vital to
Augen Gold. It is also logical and vital to replace the directors who have
stood in its way. Their opposition appears unfounded and irrational and we
believe it is not in the best interests of Augen Gold or its shareholders.
The obstruction of these two Incumbent Directors has prevented Augen Gold
from making progress on its promising Swayze Property or in addressing its
increasingly precarious financial position. We believe it has also led to the
resignation of two other independent directors from the Board.
The Special Meeting of Shareholders
As a concerned shareholder, Augen Capital has called a special meeting of
the shareholders of Augen Gold because the current Board could not - or would
not - respond to a legitimate requisition that the Company call the meeting
itself. The Special Meeting will be held at the offices of Stikeman Elliott
LLP, 5300 Commerce Court West, 199 Bay Street, Toronto, Ontario, M5L 1B9 on
Friday, March 13, 2009 at 10:00 a.m. (Toronto time).
Please note that, because Augen Gold did not call the Special Meeting, it
cannot establish a record date for voting at the Special Meeting. Therefore,
under applicable law, the record date for voting is the business day prior to
issuance of the notice of the Special Meeting, in this case, February 13,
The Concerned Shareholder is asking you to vote the enclosed proxy in
favour of four resolutions that would allow Augen Gold to move forward:
Resolution 1: fixing the number of directors at four
Resolution 2: the removal of the Incumbent Directors (Joseph Leeder
and James Stephenson) as directors of Augen Gold
Resolution 3: the election of the Concerned Shareholder's Nominees
(A. Timothy Peterson, Louis Sapi and James Sbrolla) as directors of
Resolution 4: implementation of the Debt-to-Shares Conversion
Full details of each of these resolutions are included in the enclosed
proxy circular. We recommend that you to read the Circular so you can make an
informed decision, and we ask you to vote your WHITE proxy for change.
You should understand that, if the Concerned Shareholder's Nominees are
elected to the Board, but the Debt-to-Shares Conversion is not approved, Augen
Capital will attempt to negotiate a commercially reasonable proposal to settle
the demand loan with the new Board. If shareholders do not elect the Concerned
Shareholder's Nominees and do not approve the conversion, Augen Capital will
consider all of its legal options to ensure repayment of the demand loan.
For more information about voting your WHITE proxy at the Special
Meeting, please contact Augen Capital at 1-888-442-8436.
Time is short. We urge you to act today for the future of Augen Gold.
Tony Busseri Director
(Text of letter ends)
The letter and full Proxy Circular are available at www.sedar.com as well
as the website of Augen Capital. www.augencc.com
About Augen Capital
Augen Capital Corp. ("Augen") (TSX-V: AUG) is a Toronto-based public
merchant bank specializing in the financing of and investment in emerging
resource companies. Augen manages a merchant banking hard dollar portfolio of
emerging resource stocks including private companies and is an industry
performance leader in tax-advantaged flow-through investments in Canada's
resource sector having raised over $80 million in flow-through limited
partnership assets since inception. Augen holds over one hundred gold, base
metals and uranium exploration and development public and private companies
with direct holdings in its merchant banking portfolio and consulting assets
in flow-through limited partnerships.
For more information on Augen Capital, visit our website at
The Company's public documents may be accessed at www.sedar.com
The TSX Venture has not reviewed and does not accept responsibility for
the adequacy or accuracy of this release.
For further information:
For further information: J. David Mason, Chairman, President and Chief
Executive Officer, Tel: (416) 479-3300, Toll-free: 888-442-8436,