Highlights Current Management and Board's Record of Destroying Shareholder Value
Calls on Shareholders to Elect a New Board Committed to Maximizing Shareholder Value
Urges Shareholders to Vote BLUE Proxy FOR Concerned Shareholder Nominees
TORONTO, Oct. 17, 2012 /CNW/ - Mr. Terry Lynch (the "Concerned Shareholder"), a director and former president of International PBX Ventures Ltd. ("PBX" or the "Company") has lost confidence in PBX's current management and board, has filed and is in the process of mailing a letter and Proxy Circular to PBX shareholders urging them to vote for five director nominees (the "Concerned Shareholder Nominees") at the annual general meeting of shareholders to be held on October 25, 2012.
Mr. Lynch has support from a significant percentage of the shares expected to be voted at the meeting, including the support of the Company's largest shareholder, Hong Kong Maytime International Industry Limited, a subsidiary of Jintian Copper. Hong Kong Maytime is very pleased with the Concerned Shareholder's Nominees and has expressed appreciation of their focus on enhancing shareholder value.
In the Proxy Circular, the Concerned Shareholder highlights a history of eroding shareholder value under the watch of the current management board and urges shareholders to take immediate action and vote for the five Concerned Shareholder Nominees - Mr. Ian Pirie, Mr. Terry Lynch, Mr. Peter Kent, Mr. Dan Gosselin and Mr. Zhangliang Lou. Each of these nominees is highly qualified and together they have a wealth of mining sector and public company governance experience. More detailed biographies appear in the Proxy Circular.
Mr. Lynch said: "We are seeking to improve PBX's recent dismal performance. Management has hoped that shareholders would stay quiet and chalk this poor performance up to general market conditions, but we cannot afford to remain silent. With the newly constituted, stronger board in place, I am confident that we can stop the rapid erosion in shareholder value and restore meaningful returns to investors."
The full text of the letter follows:
October 16, 2012
A LETTER TO SHAREHOLDERS OF INTERNATIONAL PBX VENTURES LTD.
Dear Fellow Shareholders:
As a current director, shareholder and former President of International PBX Ventures Ltd. ("PBX" or the "Company"), I am asking you to support my nominees to the board of directors of PBX at the annual general meeting of shareholders to be held on October 25, 2012.
The recent actions of management and the Board of PBX, as currently constituted, have forced me to take action to protect my investment and that of all PBX shareholders. There can be no doubt that PBX's current Board and management has proved unable to create shareholder value and to serve your best interests. I am confident that my slate of director nominees will provide PBX with the leadership necessary to realize on its full potential.
LOOKING AHEAD: THE RIGHT TEAM AND THE RIGHT PLAN
My nominees are Mr. Ian Pirie and myself, who will provide continuity, and Messrs. Peter Kent, Dan Gosselin and Zhangliang Lou, who will bring a fresh perspective. Each of these nominees is highly qualified and together they have a wealth of mining sector and public company governance experience. My nominees are carefully selected individuals who align with your interests as shareholders and have the commitment, experience and ability to unlock and maximize PBX's true potential value.
About My Nominees
- Ian Pirie, M.Sc., P.Geo. - Current Chairman of PBX and formerly with Inmet Mining Corporation for 31 years. He brings continuity and experience.
- Terry Lynch, BBA with Joint Honours in Business and Economics - Current director and former President of PBX, CEO of Relief Gold, a privately held mining company. I bring 15 years of management and operations experience, especially with early stage companies.
- Peter Kent, J.D., LLM - Fomerly with the TecSyn Group of Companies. He will bring over 25 years of business experience regarding complex business and legal affairs.
- Dan Gosselin, MBA - Senior executive with a leading global financial organization and is country head for the Canadian corporate trust business. He will bring strong corporate strategic leadership background, a very good understanding of both the public and private markets and an in-depth knowledge of the retail and institutional investor base.
- Zhangliang Lou, Bachelor of Information Systems - Director Manager, Strategy & Investment Department with the Ningbo Jintian (Copper) Group. He is extremely knowledgeable about all aspects of the copper industry and will bring international experience in finance and global development. He is the nominee of Hong Kong Maytime International Industry Limited, a subsidiary of Jintian Copper (the largest shareholder of PBX).
Track record of success - My nominees have the experience and qualifications necessary to provide PBX with the leadership and oversight required to maximize shareholder value.
Clear Business Objectives
My nominees and I have six simple and clear cut business objectives for PBX for 2012 and 2013:
- Value Enhancing Financing Alternatives - Secure sufficient working capital in the least dilutive manner possible to ensure PBX can operate in a manner conducive to achieving fair value for the assets it has accumulated. PBX needs to demonstrate to the market that PBX can operate until the end of the initial option period under the joint venture option agreement with Oz Exploration Chile Limitada ("OZ"), otherwise there may be a perception that PBX will, as has been done in the past, issue equity at lower and lower prices. We need to solve this problem as quickly and resolutely as possible. In particular, we believe that issuing convertible preferred shares is a potential means to provide the financing to the Company needed to last through the OZ initial option period with the least detriment to shareholders. The preferred shares would be redeemable out of proceeds of the initial OZ payment giving the option holder a doubling on their investment in two years. While giving an investor double return over two years may be a steep price, in our view, this alternative provides an attractive return and is far less expensive than issuing stock at $0.08 per share or lower.
- Assess Potential at Palo Negro - Increase focus on the Company's Palo Negro property in Chile. A China-based company has built an operating iron and copper mine in the last 18 months on 400 hectares not owned by the Company within its 7,000 hectare land holdings - a development of which management was questionably unaware. Our plan would be to employ experts, already identified, to the region to do a thorough assessment of this opportunity.
- Pursue Joint Venture Opportunities - We would seek interested parties for potential acquisition and joint venture opportunities for the Company's Tierra Del Oro and Sierra Pintada properties. It is our view that a comprehensive assessment of these projects, put together by a highly credible geologist and experienced mine finder, has not been done to date and is desperately needed. We have secured an expert with a considerable track record of success in Chile and who is fluent in Spanish who is willing to complete such a review for us which will lead to an assessment of the projects' potential. With the benefit of such a review, we can explore value maximizing partnerships.
- Responsible Tax and Financial Planning - Establish appropriate and timely tax planning so that the Company is prepared if, as and when, OZ exercises its option on Copaquire. There are a number of different scenarios that could unfold as the Company evaluates and pursues ways to deliver maximum value to shareholders. We do not believe that the current deal with OZ adequately addresses this serious issue.
- Commitment to Shareholder Communication and Outreach - Once investors are aware that there is no need for additional equity financing, we can seek to create an atmosphere wherein investors can appreciate and value the underlying worth of PBX's properties. This requires a commitment to regular communication to the existing shareholder base and a professional outreach program to introduce PBX to new shareholders.
- Support Exploration at Copaquire - Assist OZ in its exploration efforts on the Copaquire Property and disclose its drilling results in a timely manner to the marketplace. Shareholders will expect that to the extent OZ has successful drill results, there is a greater chance the option will be exercised and, as a result, the remaining 10% of Copaquire becomes worth even more. With a current market cap of approximately $10 million, we believe investors will see significant shareholder value in PBX stock, provided they believe the Company will last long enough to see the end of the option period.
Based on the foregoing strategies, I firmly believe in the potential for PBX to represent significant value for all shareholders - but only if there is a change in the majority of the Board.
STRONG SHAREHOLDER SUPPORT
I am pleased to let you know that I have the support of several significant shareholders of the Company for my nominees and our strategies, including the Company's largest shareholder, Hong Kong Maytime International Industry Limited ("Hong Kong Maytime"), and the Company's current Chairman, Ian Pirie. In particular, Hong Kong Maytime, a subsidiary of Jintian Copper, is very pleased with my Board nominees and has expressed appreciation of their focus on enhancing shareholder value.
Notwithstanding such strong support, I ask that all shareholders demonstrate their frustration and displeasure with the current Board and management and vote their BLUE proxy today.
Shareholders cannot afford to remain silent in the face of an inefficient Board and management. With the newly constituted, stronger board in place, I am confident that we can stop the rapid erosion in shareholder value and restore meaningful returns to investors. Now is the time to show the market that PBX has capital to survive as it pursues other avenues of growth. I urge you to support my nominees in order to restore market confidence, improve the stock price, and create real shareholder value.
POOR TRACK RECORD: THE WRONG TEAM AND A FAILED PLAN
Unfortunately, a history of miscues, missteps and mismanagement by the current management and a majority of the Board has significantly diminished shareholder value.
In making your decision, consider the following:
Dismal Share Price Performance
PBX's shares have underperformed the TSX Venture index in 2012. The share price has fallen from $0.12 on May 25, 2012, to $0.06 on October 12, 2012, a decrease of 50% in just six months. The share price eroded by about 85% from a high of approximately $0.29 in December, 2011 to $0.06 in October of 2012.
These decreases are a troubling reflection of poor management. PBX current management would have shareholders believe that PBX's share price destruction was a simple market factor. However, the chart below shows that in the last year, the TSX-V lost 10% in value while PBX is down 73.9%.
Source: Yahoo! Canada Finance available online at: http://ca.finance.yahoo.com/echarts?s=PBX.V#symbol=pbx.v;range=1y;compare=tsxv;indicator=volume;charttype=area;c rosshair=on;ohlcvalues=0;logscale=off;source=undefined. As of October 16, 2012.
This is a painful fact all PBX shareholders know, yet management hopes you will attribute this loss to market conditions. The truth is that we shareholders have paid an enormous price for management's mistakes.
Frequent Shareholder Dilution
While management has waffled over the past year as to how to go forward with the Copaquire property in Chile, it has completed no less than four financings (out of five attempts) - each at a successively lower price. The first, in October 2011, was priced at $0.20 a share; the second, in February 2012 at $0.15 (which was disrupted by a cease trade order issued against the Company as a result of certain deficiencies contained in its National Instrument 43-101 technical report in respect of the Copaquire Property); the third, in April 2012 at $0.08; and the fourth, in July 2012 at $0.08. A fifth financing attempt, at $0.23, was ultimately aborted in December 2011.
Failure to Obtain Fair Value for Assets
The terms of PBX's recently completed joint venture option agreement with OZ, a subsidiary of Australia's OZ Minerals Ltd., is a clear example of management's inexperience in brokering major transactions. Management became enmeshed in a confusing web of negotiations instead of taking the tried-and-trusted route of hiring a financial advisor to ensure that PBX received the best terms possible. The result was that while, based on our review, the average copper discovery worldwide, which PBX management had been using as a harbringer of value, was sold (not optioned) for 7.5 cents per pound, whereas PBX appears to have received an option valued at just 2.8 cents per pound. Furthermore, the Company will potentially have to wait two to three years to see the option exercised. Mr. Lynch supported the Joint Venture Option Agreement with OZ only because management has backed the Company into a corner and only after ensuring that the beneficial provisions related to the timing aspects of the agreement were included. In particular, current management and the majority of the Board had initially permitted OZ to effectively have an indefinite option - prudent management of a resource company, being properly advised, would not allow this to happen.
A Failed Strategic Plan
In my view, current management misguidedly believes that PBX's salvation lies in spinning out PBX's other assets via a dividend spinout of Chilean Metals Exploration Ltd. Management spent significant time and a significant portion of scarce cash pursuing this flawed plan, while concurrently negotiating the Copaquire transaction. Although the Company received final court approval for the spinout on January 13, 2012, the transaction remains in limbo. While a spin out of some or all of the assets into a second public entity remains a viable option, it is not as currently structured which would leave a poorly capitalized company with stock free trading day one. This is a scenario that will not attract fair valuation for the Company's assets and will doom shareholders to poor value for yet another ill-approached asset sale.
My objective is to maximize the value of PBX for the benefit of all shareholders by ensuring expert leadership and a strong strategic vision. I ask that you please read the enclosed information circular for additional information and details as to voting procedures.
Your vote is critical. Please sign, date and return the enclosed BLUE proxy by no later than 5:00 p.m. (Vancouver time) on October 22, 2012. Completed proxies may also be faxed to 1-866-545-5580 or 416-867-2271. Even if you have previously delivered a management proxy, the more recent proxy automatically revokes the earlier one, so vote today!
If you have any questions about completing your proxy or if you are a non-registered (beneficial) shareholder holding your shares through a broker, please contact Kingsdale Shareholder Services Inc. at 1-866-228-3049, or 1-416-867-2272 outside of North America (collect calls accepted), or by e-mail at [email protected].
Thank you for your support and the confidence in my nominees and our vision for PBX going forward.
| (signed) Terry Lynch
Certain statements in this press release contain forward-looking information within the meaning of applicable securities laws in Canada ("forward-looking information"). The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. The forward-looking information in this press release includes, but is not limited to: the nomination and election of the Concerned Shareholder Nominees and replacement of PBX's current Directors; the timing and holding of the Meeting; and the future prospects of PBX.
In connection with the forward-looking statements contained in this news release, the Concerned Shareholder has made numerous assumptions. While the Concerned Shareholder considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others, that the Concerned Shareholder Nominees may not be elected to the board of PBX. All forward-looking information in this press release is qualified in its entirety by this cautionary statement and, except as may be required by law, the Concerned Shareholder undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.
SOURCE: Concerned Shareholder of International PBX Ventures Ltd.
For further information:
Kingsdale Shareholder Services Inc. at 1-866-228-3049, or 1-416-867-2272 outside of North America (collect calls accepted), or by e-mail at [email protected]