TORONTO, Feb. 4 /CNW/ - Augen Capital Corp. ("Augen" or the "Concerned Shareholder") (TSXV: AUG) an owner of approximately 6.4 million shares or 6.4% of Staccato Gold Resources Ltd. ("Staccato" or the "Company") (TSXV: CAT) today acknowledged the decision of the Company's current Board of Directors (the "Current Board") and management to commence a formal review of its strategic options in order to enhance shareholder value.
The Concerned Shareholder is calling for much-needed change to the direction of Staccato as it believes the Current Board and management have overseen significant destruction of shareholder value and have undermined market confidence in the Company through poorly conducted exploration programs, a lack of progress in advancing its principal project, including the failure to progress expeditiously in dealing with the technical issues concerning the resource estimate, and a lack of direction and conviction in reviewing and advancing other attractive opportunities including asset or corporate acquisitions.
"It is clear that the Current Board and management recognize their failed track record in shareholder value creation," said Peter Chodos, the COO of OreReserve Asset Management, Augen's Manager. "We are very disappointed that Staccato's management has failed to engage in any exercise to create shareholder value prior to Augen's requisition to replace the Current Board. How can we trust the Current Board and management to act in the shareholder's best interests and make good business decisions when their track record says they cannot?"
Haywood Securities Inc. Engaged by Augen
The Concerned Shareholder has engaged Haywood Securities Inc. ("Haywood") to work with Augen to execute on a business plan for Staccato that will create substantive value for all Staccato shareholders. Haywood, based in Vancouver, Canada, is one of Canada's largest independent broker-dealers, with a significant retail and institutional presence. Haywood's investment bankers provide leading merger and acquisition ("M&A") and financing advisory services for mining companies, and are a leader in M&A and financial advisory services for junior mining companies. Over the last year, Haywood has been involved with over 20 pending and/or successful M&A and financial advisory assignments, resulting in enhanced shareholder value for Haywood's clients. Included in enhancing shareholder value, is advising management teams and boards of directors, with the aim of building successful mining companies. Haywood supports Augen's requisition for a meeting of the Staccato shareholders to elect a new Board of Directors. Haywood's M&A and financial advisory deal flow will also greatly aid Augen's, already strong, team.
In September 2009, Haywood approached Grant Ewing, President and CEO of Staccato, to open up a dialogue with Staccato on an attractive M&A idea, with the aim of enhancing shareholder value. Haywood was told by management at that time that the Company was solely focused on the development on its Lookout Mountain Project, and had no interest in exploring any M&A alternatives. As a result of the Concerned Shareholders requisition, Staccato has reversed course.
Shareholder Meeting Requisition
On January 25, 2010, the Concerned Shareholder delivered a requisition to the Current Board to call a meeting of the shareholders of Staccato for the purpose of removing and replacing the Current Board with nominees to be proposed by the Concerned Shareholder. Staccato confirmed it received the requisition on January 25, 2010. The Current Board has until February 15, 2010 to respond.
This press release is not, and is not to be construed to be, a solicitation of proxies. Prior to and in connection with the Meeting, Augen intends to file and distribute to all Staccato shareholders (as well as to the Company, its directors and its auditors) an information circular that contains detailed information relating to the Concerned Shareholder's nominees, the solicitation of proxies, the Meeting, and the Concerned Shareholder's plan to increase shareholder value. All Staccato's shareholders should read the Concerned Shareholder's information circular before making any voting decision.
Forward Looking Statements
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Staccato. These statements are based on suppositions and uncertainties as well as on the best possible evaluation of future events. As a result, readers are advised that actual results may differ from expected results.
Augen Capital Corp. is a Toronto-based public merchant bank specializing in the financing of and investment in emerging resource companies. Augen manages a merchant banking portfolio of emerging resource stocks.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The issuance of this news release is not an admission that an entity named in this news release owns or controls any described securities or is a joint actor with another named entity.
This news release contains forward-looking statements. These statements are based on certain factors and assumptions as set forth in this news release including expected growth, results of operations, performance and business prospects and opportunities. While the Company considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to results of exploration, project development, reclamation and capital costs of the companies in the merchant banking portfolios ("investee companies"), and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for the minerals the investee companies expect to produce; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company and investee companies. Additional risks and uncertainties can be found in our Management's Discussion and Analysis and in filings with the Canadian provincial securities commissions. Forward-looking statements are given only as at the date of this news release and the Company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Gensource Capital Corporation
For further information: For further information: Spinnaker Capital Markets Inc., Ali Mahdavi, (416) 962-3300 ext. 225, firstname.lastname@example.org; For more information on Augen, visit our website at www.augencc.com. The Concerned Shareholder's public documents may be accessed at www.sedar.com