In March 2020, Mayfair entered into an settlement to amass the Fenn-Gib gold venture within the Timmins area of Ontario. In August 2020, the Board of Administrators of Mayfair (the ” Board “), comprised of Henry Heeney and Sean Pi, the 2 founders and promoters, approached Patrick Evans to supply him the place of President and CEO of the Firm. On acceptance of the place, Mr. Evans approached a retired senior geologist, Howard Chicken, to supply him the place of Vice President, Exploration. Mr. Chicken, in flip, approached one other retired senior geologist, Paul Degagne, to supply him the place of Supervisor, Exploration. Messrs. Chicken and Degagne have been persuaded to come back out of retirement on the understanding that they’d be becoming a member of a powerful administration group led by Patrick Evans, and an organization that might have a various and skilled Board.
In and round February 2024, administration of Mayfair expressed to Patrick Evans, the Chief Govt Officer of the Firm (the ” CEO “) and members of the Compensation Committee of the Firm (the ” Compensation Committee “) that they have been involved {that a} change of management could happen in respect of the Firm. This concern was primarily based on a number of elements, together with:
- conversations between administration and Darren McLean, a guide of Muddy Waters Capital LLC (” Muddy Waters “) during which feedback have been made relating to November 2023 inventory choice grants;
- proposals made by Henry Heeney, a co-founder, former director and insider of the Firm to appoint to the Board:
- Kyle McLean, the brother of Darren McLean. Kyle McLean can also be an funding advisor at Haywood Securities Inc. (” Haywood “), who’s the custodian of sure funds directed by Muddy Waters; and
- Mr. Heeney himself,
(collectively, the ” Heeney Nominations “) pursuant to the board nomination rights settlement between the Firm and 1191123 B.C. Ltd. (a company managed by Mr. Heeney) dated March 4, 2020 (the ” Heeney Nomination Settlement “);
- Mr. Heeney’s request that the Firm have weekly conferences with Kyle McLean, who was not a director or worker of the Firm;
- a proposal made by Kyle McLean that Paul Harbridge, the previous CEO of GT Gold Corp. which was additionally the topic to a proxy contest involving Muddy Waters, be nominated to the Board; and
- Sean Pi’s actions as chairman of the Governance Committee to assist the Heeney Nominations.
Kyle McLean has no earlier expertise managing a mining firm or serving as a director of a public firm. Henry Heeney additionally has no earlier expertise serving as a director of a public firm. The Firm’s administration and staff have been additionally involved in regards to the potential nomination of different or extra administrators who might be unqualified below the Heeney Nomination Settlement and the board nomination rights settlement between the Firm and 1249495 B.C. Ltd. (a company managed by Sean Pi, a former founder and director of the Firm) dated March 4, 2020.
Administration and the workers expressed considerations to the Board that they didn’t want to be able the place they’d be pressured to work below the management of an inexperienced or unqualified board and requested that the “change of management” provisions of their respective employment agreements be up to date to handle situations involving shareholders working collectively to impact management of the Firm, and cases the place the present board members have been both changed or not constituted a majority of the Board.
Administration and the workers requested that the next language be inserted into the definition of “Change of Management” (the ” Change of Management Provisions “):
“A Change of Management happens following the sale of all or considerably the entire property of the Company; by or into one other company, entity or individual; the acquisition by any Individual or Individuals appearing collectively of adequate voting rights to have an effect on the management of the Company; any change in possession of fifty p.c (50%) or extra of the voting capital inventory of the Company; or a change within the composition of the Board that leads to the present administrators of the Board constituting lower than a majority members of the Board”.
Given the actions by Darren McLean, Henry Heeney, Kyle McLean and Sean Pi famous above, Mr. Evans and members of the Compensation Committee took administration’s considerations severely
It’s the view of the Compensation Committee that the continuity of the administration group is crucial to the continued success of the Firm. Mr. Evans and the Compensation Committee have been involved that, with out acceptable change of management provisions of their employment agreements, there might be departures by members of administration or senior staff. Mr. Evans and the Compensation Committee additionally have been involved that such departures might have a right away opposed affect on the Firm and its operations, opposed impacts on the Firm’s essential relationships with First Nations, distributors, and different stakeholder teams.
The Firm’s monitor file of sturdy monetary efficiency and continued constructive growth of the Fenn-Gib Venture is basically attributable to the power of the administration group. The Firm’s latest achievements have been acknowledged by traders, leading to strong returns for our shareholders. Together with, for instance: 1
- Superior share value efficiency. Over the previous yr, the Firm is among the many top-performing gold shares amongst Canadian gold mining exploration and growth firms. The Firm’s share value is up roughly 27%, in comparison with the typical of its peer group that are down roughly 19%. Notably the Firm’s share value has outperformed the rise within the value of gold, which solely noticed a 17% improve throughout the identical time interval.
- Premier valuation. The Firm has a value to internet asset worth a number of of 0.56 which far exceeds its peer group common of 0.26. Equally, on an enterprise worth per ounce foundation, the frequent shares of the Firm (” Frequent Shares “) commerce at $72 per ounce which is nicely above the peer group common of $39 per ounce.
- Entry to capital and share value resilience. The Firm has been profitable in accessing fairness capital to fund the event of the Fenn-Gib Venture, elevating internet proceeds of $23.4 million in 2023. On the closing share value as of the date of the Round of $2.44, the Frequent Shares are buying and selling above the Frequent Share challenge value of $2.10 (November 11, 2023 personal placement) and $1.75 (June 8, 2023 personal placement).
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1 The share value knowledge included on this information launch for the Firm and its peer group is predicated on the data offered within the Round.
Accordingly, the members of the Compensation Committee decided that the requests of administration have been affordable, and that it will be in the most effective pursuits of Mayfair to incorporate the amended change of management language of their employment agreements.
Between February 5, 2024 and February 27, 2024, the next administration personnel and staff executed amended variations of their respective employment agreements, efficient January 1, 2024, which mirrored annual wage will increase and had the impact of adopting the Change of Management Provisions, or amending the beforehand included definition of “change of management” included of their respective employment agreements to align with the Change of Management Provisions:
- Howard Chicken, Vice President, Exploration;
- Justin Byrd (by Aurous Consulting LLC), Chief Monetary Officer;
- Matthew Evans, Vice President, Company Affairs;
- Wallace Smith, Senior Geologist;
- Paul Degagne, Exploration Supervisor on the Fenn-Gib Venture;
- Alexandra Gelinas-Dechene, Senior Geologist;
- Ryan Hoefs, Senior Geologist; and
- Ian Chappell, Senior Geologist.
On or about March 5, 2024, the employment settlement for Mr. Evans, the CEO of the Firm, was amended to align the definition of “change of management” with the Change of Management Provisions. Beforehand, Mr. Evans’ employment settlement, entered into on August 12, 2020, negotiated with Henry Heeney and Sean Pi, had a broader definition for “change of management” than the Change of Management Provisions of the opposite administration personnel and staff. Accordingly, the amendments to Mr. Evans’ employment settlement served to slender the scope of circumstances the place a “change of management” would apply.
There have been no adjustments or amendments to the Change of Management Provisions or every other provisions of the related staff’ employment agreements relevant to a “change of management” following March 5, 2024.
Settlement Settlement
On or about April 19, 2024, the Firm acquired letter correspondence from Carson Block, a companion at Muddy Waters, stating that Muddy Waters and sure funding funds managed by it, had obtained assist agreements from shareholders comprising not less than 50.68% of the excellent voting share capital of Mayfair (the ” April 19 Letter “) in assist of Muddy Waters’ efforts to reconstitute the Board (the ” Reconstitution “). The April 19 Letter enclosed assist agreements (the ” Help Agreements “) signed by Kyle McLean, William Smith, a dealer at Haywood, and Michael Simpson, an funding advisor at Haywood who each share a fee pool with Kyle McLean, Mireille Potentier (Michael Simpson’s partner), Henry Heeney, 1249487 B.C. Ltd. (a company managed by Henry Heeney’s mom), and 1249495 B.C. Ltd. (a company managed by Mr. Pi) (collectively, the ” Supporting Shareholders “). The Supporting Shareholders have intensive household, enterprise and monetary relationships with Muddy Waters or one another, over and above the Help Agreements.
On or about Could 1, 2024, as a direct consequence of Muddy Waters’ repeated threats of litigation and calls for that the Firm not honour its employment contracts with its staff, Patrick Evans (CEO), Justin Byrd (CFO), Howard Chicken (Vice President of Exploration) and sure different staff listed above (the ” Terminating Staff “) delivered notices (the ” Terminating Notices “) to the Board terminating their respective employment settlement. The Terminating Staff took the place that the actions of Muddy Waters and the Supporting Shareholders as detailed within the April 19 Letter and Help Agreements constituted a change of management in accordance with the Change of Management Provisions within the respective employment agreements (the ” Change of Management Occasion “).
That very same day, Harry Pokrandt, the Chair of the Board, wrote to the Terminating Staff requesting they maintain their Terminating Notices in abeyance till the Firm might meet with them to debate an answer which might keep away from disruption to the Firm’s operations. The Terminating Staff agreed.
Over the subsequent a number of days, counsel to the Firm and counsel to the Terminating Staff drew up phrases of a settlement settlement whereby the Terminating Staff agreed to carry in abeyance their Terminating Notices and proceed their employment with the Firm as much as the Assembly. The proposed settlement settlement included, amongst others, the next phrases:
- ” Belief Launch Situation ” means a change within the composition of the Board on the Assembly that leads to the present administrators constituting lower than a majority of the members of the Board;
- the Firm shall ship the mixture quantity of C$3,998,585, such quantity representing the mixture termination funds payable in respect of the Change of Management Occasion pursuant to the employment agreements right into a non-interest bearing belief account (the ” Change of Management Fee “);
- every Terminating Discover shall be held in abeyance, and shall haven’t any authorized impact upon their respective employment agreements, pending achievement of both:
- the Change of Management Fee being launched by the trustee to the workers of their respective parts instantly following the passing of a movement or collection of motions on the Assembly whereby the Belief Launch Situation is happy; or
- if the Belief Launch Situation shouldn’t be happy, following the election of the Board on the Assembly, every Terminating Worker shall instantly present written notification to the trustee and the Firm indicating if: (i) their Terminating Discover is to have fast impact because of the Change of Management Occasion; or (ii) their Terminating Discover is to be rescinded with fast impact,
- every Terminating Worker shall launch the Firm from any and all claims and proceedings of each nature and sort in any respect in reference to the Settlement Settlement.
The settlement settlement, efficient Could 6, 2024, was agreed to by the Terminating Staff and the Firm following a gathering of the Board held on Could 6, 2024 (the ” Settlement Settlement “).
The Board thought of the next actions of Muddy Waters in gentle of the Terminating Staff place in respect of the Change of Management Occasion:
- Muddy Waters’ acquisition of shares on April 11, 2024, after it had entered right into a voting assist settlement with Henry Heeney;
- the connection between Muddy Waters and Henry Heeney, together with the voting assist settlement, would seemingly be considered by a courtroom that these shareholders have been appearing collectively;
- Henry Heeney’s statements to Mr. Pokrandt that that he was a “value taker” in respect of the Reconstitution and that Mr. Heeney needed to “associate with” something Muddy Waters proposed;
- the mixed Muddy Waters voting illustration with Mr. Heeney’s shareholding surpassed 20% of the voting rights and should have been adequate to have an effect on management throughout the that means of the change of management provisions;
- the extra Help Agreements offered by Muddy Waters indicating in extra of fifty% of the Firm’s excellent voting capital; and
- Muddy Waters’ demand that the Board resign instantly and get replaced by Muddy Waters’ nominees.
The Board additionally obtained and thought of a reasoned authorized opinion from Borden Ladner Gervais LLP, its unbiased counsel, in respect of the Terminating Notices and whether or not the Change of Management Occasion certified as a change of management pursuant to the Change of Management Provisions, dated Could 6, 2024.
The Board finally decided that there was some degree of danger that, regardless of the language of the Change of Management Provisions, the Change of Management Occasion could not qualify as a change of management below the Terminating Staff’ employment agreements.
Nevertheless, the Board decided {that a} change of management, as outlined within the Terminating Staff’ employment agreements, would happen if a majority of the present Board weren’t re-elected on the Assembly.
This left the Board with basically three choices to proceed:
- settle for the Terminating Notices and make the Change of Management Fee;
- dispute the Terminating Notices and refuse to make the Change of Management Fee; or
- come to an settlement with the Terminating Staff that might see them keep their positions till not less than the Assembly.
The Board thought of the primary two choices to not be in the most effective pursuits of the Firm as every would contain the fast departure of the Firm’s senior administration and plenty of of its key staff. For instance, if the Terminating Staff terminated their employment (no matter whether or not the Change of Management Fee was made), there could be:
- a right away opposed affect on the Firm, its operations, and its capacity to adjust to ongoing disclosure obligations below securities legal guidelines and inventory alternate necessities;
- a possible opposed affect the Firm’s capacity to recruit future staff;
- no capacity to coordinate a clean transition to a brand new administration group;
- shareholder considerations, opposed impacts on the Firm’s share value with no warning to the shareholders or the market, and no alternative for the Firm’s stakeholders to regulate their funding in gentle of a change to the administration group ensuing from Muddy Waters’ actions; and
- opposed impacts on the Firm’s essential relationships with First Nations, distributors, and different stakeholder teams, all of whom had already expressed critical considerations over Muddy Waters’ actions; and
- the price of potential litigation with the Terminating Staff if the Terminating Notices have been disputed.
The Settlement Settlement, then again, retains senior administration and key staff by the Assembly, permits for a smoother transition of administration, offers shareholders and the market with a chance to think about the adjustments to administration ensuing from Muddy Waters’ actions, and permits the Firm a chance to take care of, and if mandatory, transition its relationships with First Nations, distributors, and different stakeholder teams.
Patrick Evans abstained from the Board’s vote on whether or not to just accept the Settlement Settlement, given his curiosity within the Settlement Settlement. The opposite Board members voted unanimously in favour of the Settlement Settlement.
Proxy Contest
The Board advises shareholders to vote the WHITE Proxy or voting instruction type nicely upfront of the deadline at 2:00 p.m. (Pacific time) on June 3, 2024, in reference to the upcoming Assembly. Shareholders who’ve any questions referring to the Assembly or in regards to the completion and supply of the WHITE Proxy or voting instruction type, could contact Alliance Advisors, LLC by phone at 844-858-7380 or electronic mail at Mayfair@allianceadvisors.com.
Further particulars referring to the issues to be voted upon on the Assembly and the Board’s suggestions are included within the Round, which is obtainable on www.sedarplus.ca, in addition to the Investor Sources part of the Firm’s web site at https://mayfairgold.ca/investor-resources/.
Scientific and Technical Info
Scientific and technical info contained on this information launch has been derived, partly, from the Firm’s technical report titled ” Nationwide Instrument 43 101 Technical Report Fenn–Gib Venture, Ontario, Canada ” with an efficient date of April 6, 2023 and reviewed and authorized by Tim Maunula, an unbiased “certified individual” pursuant to Nationwide Instrument 43-101 – Requirements of Disclosure for Mineral Initiatives .
About Mayfair
Mayfair Gold is a Canadian mineral exploration firm centered on advancing the 100% managed Fenn-Gib gold venture within the Timmins area of Northern Ontario. The Fenn-Gib gold deposit is Mayfair’s flagship asset and presently hosts an up to date NI 43-101 useful resource estimate with an efficient date of April 6, 2023 with a complete Indicated Useful resource of 113.69M tonnes containing 3.38M ounces at a grade of 0.93 g/t Au and an Inferred Useful resource of 5.72M tonnes containing 0.16M ounces at a grade of 0.85 g/t Au at a 0.40 g/t Au cut-off grade. The Fenn-Gib deposit has a strike size of over 1.5km with widths ranging over 500m. The gold mineralized zones stay open at depth and alongside strike to the east and west. Not too long ago accomplished metallurgical checks verify that the Fenn-Gib deposit can ship sturdy gold recoveries of as much as 94%.
ON BEHALF OF THE BOARD OF DIRECTORS
For additional info contact:
Patrick Evans, President and CEO
Cellphone: (416) 670-5114
E-mail: patrick@mayfairgold.ca
Net: www.mayfairgold.ca
Media contact:
John Vincic, Oakstrom Advisors
Cellphone: (647) 402-6375
E-mail: john@oakstrom.com
For info on voting:
Alliance Advisors, LLC
Cellphone: 1-844-858-7380
E-mail: Mayfair@allianceadvisors.com
Ahead Trying Statements
This information launch accommodates forward-looking statements and forward-looking info throughout the that means of Canadian securities laws (collectively, ” forward-looking statements “) that relate to Mayfair’s present expectations and views of future occasions. Ahead-looking statements and should contain estimates, assumptions and uncertainties which might trigger precise outcomes or outcomes to vary materially from these expressed in such forward-looking statements. No assurance will be on condition that these expectations will show to be appropriate and such forward-looking statements included on this information launch shouldn’t be unduly relied upon. These statements communicate solely as of the date of this information launch.
Ahead-looking statements are primarily based on quite a few assumptions and are topic to quite a few dangers and uncertainties, lots of that are past Mayfair’s management, which might trigger precise outcomes and occasions to vary materially from these which are disclosed in or implied by such forward- wanting statements. Mayfair undertakes no obligation to replace or revise any forward-looking statements, whether or not because of new info, future occasions or in any other case, besides as could also be required by regulation. New elements emerge infrequently, and it isn’t doable for Mayfair to foretell all of them, or assess the affect of every such issue or the extent to which any issue, or mixture of things, could trigger outcomes to vary materially from these contained in any forward-looking assertion. Any forward-looking statements contained on this information launch are expressly certified of their entirety by this cautionary assertion.
Neither the TSX Enterprise Alternate nor its Regulation Companies Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Alternate) accepts duty for the adequacy or accuracy of this information launch.