Advance Notice Confirmed as of Record Date with Fancamp Exploration Ltd. for the Nomination of Six Director Nominees to Replace Entrenched Directors of Fancamp Exploration Ltd.

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Montreal, Quebec–(Newsfile Corp. – May 31, 2021) – Incumbent director of Fancamp Exploration Ltd. (“Fancamp” or the “Company“), Dr. Peter H. Smith, who, together with joint actors James Hunter and his affiliates, Mark Fekete and Heather Hannan, (the “Concerned Shareholders“) hold in aggregate, directly and indirectly an aggregate of 22,285,597 shares, representing approximately 13.42% of Fancamp’s, has filed a notice (the “Notice“) with the Corporate Secretary of Fancamp confirming the nomination of six highly-experienced independent directors to be elected to the board of the Company (the “Board“) at the annual general meeting of the Company to be held on June 29, 2021 (the “Meeting“). Assuming exercise of Dr. Smith’s 2,400,000 options, Dr. Smith, together with all joint actors would have ownership and control over an aggregate of 24,685,597 common shares of Fancamp representing approximately 14.66% of the then issued and outstanding common shares of the Company.

The Concerned Shareholders’ proposed slate of director nominees include Dr. Peter H. Smith, James Hunter, Louis Doyle, Mark Fekete, Greg Ferron and Mathieu Stephens (the “Nominee Slate“) each of whom is highly qualified and well-known in the business community. A copy of the Notice is available under Fancamp’s SEDAR profile at www.sedar.com. The following table contains information regarding the proposed Nominees,’ principal occupations for the past 5 years, and security holdings in Fancamp:

Name Current Principal Occupation or Employment and Principal Occupation or Employment within the Five Preceding Years Number of Fancamp Common Shares Owned or Controlled(1) Position with the Company, Proposed Office and Term
Peter Henderson
Smith
Dr. Smith was the President and Chief Executive Officer (“CEO“) of Fancamp from January 1986 until November 2012 when he retained Chairmanship. He was reappointed interim President & CEO by board decision in March 2014. He was re-elected to the positions of President & CEO at the annual general meeting in October 2014, which he held until August 2020. Dr. Smith served as Chairman of Fancamp from 1986 to December 2010 and from October 2012 to October 2019.
Dr. Smith has confirmed he will comply with the Company’s Corporate Policies and Guidelines.
Dr. Smith is not “independent” of the company within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 Audit Committees.
4,511,097(2)(3) Chairman from 1986 to December 2010 and from October 2012 to October 2019.
President and CEO from January 1986 to November 2012 and from October 2014 until August 2020.
Interim President and CEO from March 2014 to October 2014.
Dr. Smith has been a Director of Fancamp since January 1986. His current appointment as a Director will expire at the Meeting, and upon re-appointment at the Meeting he will serve for a term expiring at the next annual general meeting.
James
Hunter
Mr. Hunter is currently a Realtor with EXP Realty Ltd., a position held since January 2021. Mr. Hunter’s has been a Realtor for his principle occupation for the last 16 years. Mr. Hunter is also the president of Llewellyn Holdings Ltd., a private investment company. Mr. Hunter has been a licensed power engineer since 1982.
Mr. Hunter has confirmed he will comply with the Company’s Corporate Policies and Guidelines.
Mr. Hunter is “independent” of the company within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 Audit Committees.
16,832,000(4) Proposed Director
Upon appointment at the Meeting he will serve as a director for a term expiring at the next annual general meeting.
Louis Doyle Mr. Doyle is executive Director of Québec Bourse, a position he has held for the past five years.
Mr. Doyle was the Compliance officer of Terranueva Corporation (a Canadian Securities Exchange (“CSE”) listed company) from December 2018 to September 2020.
Mr. Doyle is currently a director of Abitibi Royalties Inc. (a TSX Venture Exchange (“TSXV”) listed issuer). Mr. Doyle was previously a director of Terranueva Corporation from December 2018 to April 2021 and Mondias Natural Products Inc. now Lumiera Health Inc. (a TSXV listed issuer) from November 2018 to September 2020.
Mr. Doyle has confirmed he will comply with the Company’s Corporate Policies and Guidelines.
Mr. Doyle is “independent” of the company within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 Audit Committees.
50,000 Proposed Director
Upon appointment at the Meeting he will serve as a director for a term expiring at the next annual general meeting.
Mark Fekete Mr. Fekete is President and CEO of Breakaway Exploration Management Inc., a company that provides consulting services to the exploration industry.
Since April 2019, he has been the CEO and director of Auston Capital Corp. Previously he was CEO and a director of Hinterland Metals Corp. up to January 2019, and Vice President and a director of Taku Gold Corp. up to November 2017.
Mr. Fekete is “independent” of the company within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 Audit Committees.
500,000 Proposed Director
Upon appointment at the Meeting he will serve as a director for a term expiring at the next annual general meeting.
Greg Ferron Mr. Ferron was the Chief Executive Officer and Director of Treasury Metals Inc. from September 2018 until November 2020. Previously, from 2011 to 2019 he was the Vice President Corporate Development and Investor Relations at Laramide Resources Ltd. and Vice President Corporate Development of Treasury Metals from 2012 to 2018. Mr. Ferron has had senior roles at TMX Group Limited and Scotiabank. Currently Mr. Ferron is head of the audit committee and chairman of the finance committee at Platinex Inc. and provides capital market advisory services to private and publicly traded resource companies.
Mr. Ferron has confirmed he will comply with the Company’s Corporate Policies and Guidelines.
Mr. Ferron is “independent” of the company within the meaning of sections 1.4 and 1.5 of National Instrument 52-110.
1,175,000 Proposed Director
Upon appointment at the Meeting he will serve as a director for a term expiring at the next annual general meeting.
Mathieu Stephens Mr. Stephens serves as a consultant to Troilus Gold Corporation. Previously, Mr. Stephens served as the President and CEO of UrbanGold Minerals from February 2019 to May, 2021. From January 2016 to October 2018 Mr. Stephens served as Vice-President of Exploration for Beaufield Resources Inc.
Mr. Stephens has confirmed he will comply with the Company’s Corporate Policies and Guidelines.
Mr. Stephens is “independent” of the company within the meaning of sections 1.4 and 1.5 of National Instrument 52-110.
100,000 Proposed Director
At the Meeting the nominee will be elected to serve as a director for a term expiring at the next annual general meeting.

 

(1) Information as to the securities of Fancamp beneficially owned or controlled, or directed, directly or indirectly by the Smith Nominees, not being within the knowledge of Dr. Smith, has been furnished by such persons as of the date of this notice and reflects securities owned or controlled as at the date of this notice.

(2) Includes 4,311,097 common shares held by Dr. Smith directly (3,078,474 registered common shares and 1,232,623 common shares held beneficially) and 200,00 shares beneficially controlled by Dr. Smith on behalf of the Estate of Hazel Smith. Dr. Smith also holds stock options to acquire 2,400,000 common shares.

(3) As disclosed in his early warning report, Dr. Smith is acting jointly and in concert with James Hunter, Mark Fekete and Heather Hannan. As at the date of this notice, Dr. Smith, Mr. Hunter, Mr. Fekete and Ms. Hannan as joint actors, own or control an aggregate of 22,285,597 common shares

(4) Includes 12,785,000 common shares beneficially owned indirectly through Llewellyn Holdings Ltd., a company controlled by James Hunter, and 4,047,000 shares held directly.

As disclosed on May 17, 2021, Dr. Smith previously submitted notice of his nomination of the Nominee Slate, in accordance with an Advance Notice Policy which was attached as Schedule “A” to the Company’s management information circular, for the annual general meeting of shareholders of Fancamp held on October 25, 2013 (the “Policy“).

On May 18, 2021, Fancamp’s legal counsel requested responses to each of the questions below (the “Requests“). While Dr. Smith maintains the questions posed go far beyond the parameters of the scope of information permitted to be requested to be furnished by the Nominee Slate under the terms of any advance notice policy that would comply with current industry standards, without in any way conceding that such Requests are appropriate, each of the members of the Nominee Slate has confirmed their response to the Requests as follows:

REQUEST: “Please confirm that neither Peter H. Smith (“Mr. Smith”) nor any of his joint actors, nor any of his or their affiliates or representatives (collectively, the “Dissident Group”) will be reimbursed by (or seek reimbursement from) Fancamp for any costs or expenses incurred by the Dissident Group directly or indirectly in connection with its efforts to remove and replace directors of Fancamp;

RESPONSE: As disclosed in all news releases disseminated by the Concerned Shareholders since December 22, 2020, “subject to applicable law, the Concerned Shareholders may seek reimbursement from Fancamp of the Concerned Shareholders’ out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Company’s board of directors.”

REQUEST: “Please confirm that, if elected by shareholders of Fancamp, no nominees of the Dissident Group will cease, or hinder the ability of Fancamp to complete, the forensic investigation on the activities of Mr. Smith;

REQUEST: “Please confirm that, if elected by shareholders of Fancamp, no nominees of the Dissident Group will take any action to end or interfere with the litigation brought by Fancamp against Mr. Smith;

REQUEST: “Please confirm that, if elected by shareholders of Fancamp, no nominees of the Dissident Group will take any action to dismiss or otherwise interfere with any regulatory investigation involving Mr. Smith.”

In response to each of the foregoing Requests, the Nominee Slate have collectively confirmed as follows:

  1. We understand our obligations, if elected, are to exercise our fiduciary duties in accordance with applicable law in our roles as directors, based on the information and advice available to us at the time any decision in our capacity as directors is required to be made.
  2. At the present time, while we are being asked to confirm our proposed actions once elected, we have only limited knowledge of any forensic investigation on the activities of Dr. Smith, any litigation brought by Fancamp against Dr. Smith or any regulatory investigation involving Dr. Smith (the “Allegations“).
  3. As at the date hereof, our only knowledge related to any Allegation is limited to what has been contained in news releases on the foregoing subjects and the Notice of Civil Claim, dated May 10, 2021, filed by Fancamp.
  4. We understand that all allegations made by Fancamp against Dr. Smith are, at this time unproven and all such investigations and actions, to the extent that they exist, are ongoing.
  5. We also have no information relating to the costs of pursuing these matters or the potential benefits and risks associated with them and/or whether the investigation should be expanded.
  6. Based on the foregoing, and on our understanding of our fiduciary duties, which must be exercised upon election after having had access to any and all information available to Fancamp’s board of directors at the time of our election, we respectfully decline to provide any confirmation of any proposed decision or course of action, as doing so may be an illegal fettering of our future discretion as directors of Fancamp.
  7. We confirm that our review of these matters will be conducted with integrity and will include a fulsome review of all final facts in determining any action to be taken.

It is shameful that the entrenched board and management are trying to create a situation where they will try to invalidate our Nominee Slate using their advance notice policy which is from 2013 and not considered compliant with industry standards in 2021. Institutional Shareholder Services (“ISS“) has issued the following updates annually with respect to the advanced notice bylaw provisions and it is clearly stated that the following would be considered problematic under ISS’ evaluation (the list is not exhaustive):

  • A requirement that any proposed nominee deliver a written agreement wherein the proposed nominee acknowledges and agrees, in advance, to comply with all policies and guidelines of the company that are applicable to directors;
  • Any disclosure request within the advance notice requirement, or the company’s ability to request additional disclosure of the nominating shareholder(s) or the shareholder nominee(s) that exceeds what is required in a dissident proxy circular or, goes beyond what is required under law or regulation;

Clearly the requests above are not ISS compliant. These requests are clearly an attempt to use the advance notice policy as a sword in the hands of the entrenched board and management to exclude nominations given on ample notice and not a shield to protect shareholders and management from ambush, which the courts have held is not permissible.

Furthermore, as stated in our May 14, 2021 press release, Dr. Smith has proposed a number of protocols to ensure that the Meeting takes place in an orderly fashion and with integrity and that the shareholders are not disenfranchised either before or at the Meeting. These proposals include a request for an independent chair, a procedure for disputed ballots, and procedure for court or regulatory challenges following the Meeting to allow for any issues arising to be resolved prior to the closing of the arrangement with ScoZinc Mining Ltd. (the “Arrangement“), which the Nominee Slate has indicated that it does not intend to complete, if elected. These requests are consistent with good corporate governance expectations and will allow shareholders to choose the board they want and to allow their views on the Arrangement to be heard prior to any closing of the Arrangement. However, as you may have seen in the Company’s press release dated May 26, 2021, they have denied all of our requests and state that our requests are needless and completely off market. They state that the AGM and the process leading up to it will be conducted with integrity – this is coming from an entrenched board and management team that wanted to close a highly dilutive transaction with ScoZinc Mining Ltd., without getting shareholder approval. If they are willing to do that on a large scale, why would we think that they will hold the AGM in a fair manner?

Moreover, Fancamp has said that it refuses to “engage further in a debate on these issues”. Fancamp seeks to have the Nominee Slate agree not to pursue reimbursement for any of its costs, which is legally permissible. These positions are simply unsupportable given that Fancamp has retained FOUR different law firms, a proxy solicitor and a forensic accountant at undisclosed but undoubtedly exorbitant costs to support the current Board. Fancamp also says that the Smith Nominees should not be entitled to a reimbursement for a proxy fight Dr. Smith “started”. The Company appears to suggest that no shareholder should ever exercise their rights to put forward a dissident slate and instead allow an entrenched board who is concerned with its own interests rather than those of the Company and its shareholders to continue unchallenged.

Lastly, we find it amazing to see the lengths the entrenched board and management of Fancamp are willing to go. In their press release dated May 26, 2021, they go as far as to say that Dr. Smith has not preserved documents and is obstructing the Company’s efforts to obtain information from Dr. Smith. The truth is the Company currently has access to all information that it is seeking from other sources and that the Company has made requests that are intended solely for the purpose of a fishing expedition for the proxy fight. However, on Monday May 3, 2021 in response to a request from the Company delivered on Friday April 30, 2021 to produce 35 years worth of material within 3 days, Dr. Smith still offered to make available to the Company, banker’s boxes, which represented copies of materials that are otherwise available to the Company. Dr. Smith offered that a courier could be sent to Dr. Smith’s home to pick-up these materials. Dr. Smith also noted that he requested a third party to assemble the relevant electronic materials and would provide in due course, with the most recent data being provided first. Dr. Smith also invited the Company to advise if it had specific discreet information, it required immediately or specific information that it would like prioritized and Dr. Smith would attempt to provide or direct the Company to that information. However, Dr. Smith received no response until he received a letter on Mother’s Day. Dr. Smith received a letter by email requesting to pick up the bankers boxes within 48 hours. Dr. Smith subsequently received another letter by email on Sunday May 9, 2021 at 9:03 p.m. (PST). This letter did not ask for the return of documents but rather asked that Dr. Smith preserve all documentation. This request required confirmation by 4:00 p.m., the following day, Monday May 10, 2021, that Dr. Smith would preserve all documents. The following day, Monday, May 10, 2021, the Company commenced litigation against Dr. Smith alleging a number of items, one of which is that Dr. Smith obstructed the Company’s efforts to obtain information from him. The Notice of Civil Claim was sent by email to Dr. Smith at 4:06 p.m. on May 10, 2021!

On May 26, 2021, the Company issued a news release which contain numerous misrepresentations, including with respect to the return of documents. In that news release, the Company states that it would file an application for a Safeguard Order with the Quebec Superior Court to obtain information from Dr. Smith. As noted above, Dr. Smith offered to return the banker’s boxes and provide electronic documents once obtained from the third party. Rather than simply accepting that offer, the Company chose to sue Dr. Smith. While Dr. Smith’s original intention had been to turn the documents over to the Company, as a result of the litigation, Dr. Smith is now obligated to review and list the documentation and produce it in accordance with the rules of court. There is no obligation to confirm that Dr. Smith intends to preserve documentation as that is an obligation on any party to litigation, however, Dr. Smith confirmed that Dr. Smith intends to preserve such documentation and make production in accordance with the rules of court. Dr. Smith has not yet been served with any materials relating to the Quebec Superior Court application referred to in the news release, but it is evident that this application is simply another example of the Company taking steps to exert pressure and intimidation for the sole purpose of winning the proxy fight.

The Company refers in its May 26, 2021 news release to Dr. Smith having the help of “his friends”. There is no basis to support the assertion, Mattieu Stephens, for example, has not even met Dr. Smith until he was put forward as a nominee. The news release further states: “With no one to watch him, hold him accountable or put in place the appropriate checks and balances, Mr. Smith will have free reign to do as he pleases”. If the allegations made against Dr. Smith were true, this is precisely what the current Board has been doing for the past 8 years? The five independent nominees have not shown any similar failings as the current Board.

As noted above and as will be discussed more fully in the Concerned Shareholders’ circular to be issued, we want to reiterate that it is the intention of the Nominee Slate, if elected, to not complete the Arrangement. As such, a vote in favour of the Nominee Slate should be considered a vote cast against the Arrangement, which is a highly dilutive non-arm’s length transaction. Instead, the Nominee Slate intends to focus on the diversified strong portfolio of assets that the Company has and continue with further exploration activities.

The Concerned Shareholders intend to solicit proxies in connection with the Meeting and have retained Gryphon Advisors Inc. (“Gryphon“) as their strategic shareholder communications and proxy advisor. Gryphon’s responsibility will include providing strategic advice and advising the Concerned Shareholders with respect to the Meeting and proxy protocol. Gryphon’s responsibilities also include soliciting shareholders on behalf of Concerned Shareholders.

For more information regarding the Concerned Shareholders’ position please contact:
Gryphon Advisors Inc.
Tel: 1-833-461-3651
Email: inquiries@gryphonadvisors.ca

Information in Support of Public Broadcast Solicitation

The Concerned Shareholders include the following:

  • Dr. Peter Henderson Smith of Westmount, Quebec who holds direct and indirect beneficial ownership and control over an aggregate of 4,511,097 common shares of Fancamp;
  • James R. Hunter of Saskatoon, Saskatchewan, who holds direct and indirect (through Llewellyn Holdings, of Regina Saskatchewan, a company controlled by Mr. Hunter) beneficial ownership and control over an aggregate of 16,832,000 common shares of Fancamp;
  • Mark Fekete of Montreal, Quebec, who holds direct beneficial ownership and control over an aggregate of 500,000 common shares of Fancamp; and
  • Heather Hannan, of Westmount Quebec who holds direct beneficial ownership and control over an aggregate of 442,500 common shares of Fancamp.

The Concerned Shareholders intend to solicit proxies in connection with the Meeting and have have retained Gryphon Advisors Inc. (“Gryphon“) as their strategic shareholder communications and proxy advisor. Gryphon’s responsibility will include providing strategic advice and advising the Concerned Shareholders with respect to the Meeting and proxy protocol. Gryphon’s responsibilities also include soliciting shareholders on behalf of Concerned Shareholders. In connection with these services Gryphon are expected to receive a fee of up to CAD $150,000. Proxies may also be solicited personally or by telephone by the Concerned Shareholders. The Concerned Shareholders estimate the aggregate cost of the proxy solicitation will be approximately CAD $170,000, excluding legal fees.

The cost incurred by the Concerned Shareholders in connection with such solicitation will be borne directly by the Concerned Shareholders, provided that, subject to applicable law, the Concerned Shareholders may seek reimbursement from Fancamp of the Concerned Shareholders’ out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Company’s board of directors. If any solicitations are made by the Concerned Shareholders, they will only be made by or on behalf of the Concerned Shareholders, who will receive no additional compensation for such solicitation.

Any solicitation made by the Concerned Shareholders in advance of the Meeting, is or will be, as applicable, made by the Concerned Shareholders and not by or on behalf of the management of Fancamp. All costs incurred for any solicitation will be borne by the Concerned Shareholders,

The Concerned Shareholders may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholders. Any proxies solicited by or on behalf of the Concerned Shareholders, including by any other agent retained by the Concerned Shareholders, may be solicited pursuant to a dissident information circular or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian corporate and securities laws. Any such proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law.

The registered address of Fancamp is located at 7290 Gray Avenue, Burnaby, British Columbia V5J 3Z2. A copy of this press release may be obtained on Fancamp’ SEDAR profile at www.sedar.com.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/85858