GrowMax Resources Corp. (the “Company” or
“GrowMax Resources”) (TSX-V: GRO) today issued a letter to
shareholders ahead of its upcoming annual and special meeting of
shareholders to be held on September 25, 2018.
The letter highlights the facts and benefits of
the PrimaSea acquisition which, for GrowMax shareholders, include
ownership of a multi-generational lithothamnion asset, immediate
revenues, near term cash flow, and an enhanced team with
international sales capabilities. The letter also addresses
misinformation that is being promoted by a self-interested activist
with a hidden agenda.
Shareholders are encouraged to review the letter
below and vote only their BLUE Proxy
“FOR” the PrimaSea acquisition and
“FOR” all of management’s qualified and
experienced director nominees.
The deadline to vote is 10:00 a.m. (Calgary
time), being 12:00 p.m. (Toronto time), Friday, September 21, 2018.
If you have already voted using another proxy, you may vote again
on the BLUE Proxy. The later dated
BLUE Proxy will count as it supersedes any
previously given proxy.
Vote BLUE today at proxyvote.com or by
contacting Kingsdale Advisors toll free at 1-866-581-1479 or by
email at contactus@kingsdaleadvisors.com. There is a team standing
by to help.
The full contents of the letter are included
below:
September 14, 2018
Dear Fellow GrowMax Shareholder,
Your vote at the upcoming annual and special meeting of our
shareholders (the “Meeting”) will determine the future of your
investment at a critical moment in GrowMax’s history. As previously
announced, shareholders at the Meeting will be asked to consider
and vote upon a number of items of business, including the
acquisition of PrimaSea Holdings Ltd. (“PrimaSea”) which, through
its wholly-owned subsidiary — Fertimar Mineração e Navegação Ltda.
(“Fertimar”), is an established producer of lithothamnion based
premium organic animal feed and plant fertilizer products based in
Latin America.
This is truly a transformative acquisition that already has the
support of the holders of 32% of our shares, has been confirmed as
fair by Growmax’s financial advisor, has received the unanimous
support of the GrowMax Board, and has been recommended by leading
independent proxy advisor, Institutional Shareholder Services Inc.
(“ISS”).
“(GrowMax’s) consolidation of organic animal feed
supplement and plant nutrient assets in Latin America, one of the
fastest growing markets for fertilizer products, appears to be an
attractive opportunity, especially considering the board's
expertise.
“More importantly, the proposed acquisition of an
operating business with proven harvesting, processing and sales
capabilities and with commercialized organic animal feed supplement
and plant nutrient products appears to provide a sound strategic
rationale and a new strategic plan for the company, especially
considering the board's fertilizer expertise.”
-
Institutional Shareholder Services Inc.
SETTING THE RECORD STRAIGHT WITH FACTS ABOUT THE
PRIMASEA ACQUISITION
While the PrimaSea acquisition has received widespread support
from stakeholders and independent third parties, we are aware that
BullRun Capital, a self-interested dissident, has been spreading
misinformation about the transaction. We’re pleased to set the
record straight with facts.
By voting FOR the PrimaSea transaction, GrowMax receives:
Production capacity: GrowMax will immediately
become a producer of lithothamnion based premium organic animal
feed and plant fertilizer products. We will operate a
fully-licensed extraction project with an existing license which
allows Fertimar to produce up to 120,000 tonnes of product per
annum. Applications have already commenced to increase the
allowable production to 240,000 tonnes per annum.
Revenues and near-term cash flows. We will be
generating immediate revenues – currently PrimaSea sells all of the
product it produces. After significant investments in its team,
infrastructure, permitting, certification and product development,
PrimaSea is poised to enter a sales-driven stage.
Ownership of a multi-generational asset.
Earlier this week we filed an expert’s report about Fertimar’s
lithothamnion project. The report estimates 7.1 million tonnes of
extractable lithothamnion, indicating the available lithothamnion
is sufficient for many decades of production. The report is
available at GrowMax’s profile at www.Sedar.com.
An enhanced team. PrimaSea has a strong
management team with significant sales capabilities in Latin
America and beyond. Upon completion of the PrimaSea acquisition,
the GrowMax Board will consist of seven directors, three of which
will be appointed by PrimaSea’s shareholders. The new directors
have international business development experience and expertise in
agriculture and finance.
Our fundamental investment thesis is based on: (i) the fact that
the specialty plant and animal nutrient sector is attracting strong
investor interest, as supported by significant share-price
appreciation for several companies operating in it, and (ii) the
addition of a long-life asset with upside for production
expansion.
As our new management team builds out sales and our strengthened
independent board helps us expand our international presence, the
opportunity for GrowMax to achieve its growth objectives — in
Brazil and in global markets — is now better than ever. For more
information about the benefits of the PrimaSea transaction, please
visit https://www.growmaxcorp.com/shareholder-voting.
A PROMISING FUTURE WITH A RENEWED BOARD AND MANAGEMENT
TEAM
Since 2017, in the face of slumping commodity prices, we’ve
actively taken steps to enhance our operations. Our new management
team has slashed spending and, moving forward, we have
significantly reduced management salaries to where our compensation
is more closely tied to share performance.
We’ve also refreshed our board with the addition of two highly
qualified and independent directors - John Van Brunt and Steven
Paxton. Mr. Van Brunt is a chemical engineer and fertilizer
industry executive with more than 40 years of experience including
– most notably as CEO of Agrium. Mr. Paxton is an experienced
director with expertise in global fertilizer sales and marketing
and, most recently, was the Vice President International Sales for
the Mosaic Company.
In addition to lowering costs and bolstering our team, we
announced a new value-enhancing strategic plan to leverage our
strong cash position and board expertise to consolidate organic
animal and plant nutrient assets in Latin America.
To date, our management and directors have reviewed many merger
and acquisition opportunities in Latin America. Our requirements
have been that the target company have near-term cash flow, long
term growth and value potential, and a strong management team with
a track record of managing successful projects. PrimaSea meets all
our criteria.
BULLRUN WILL DERAIL THE PRIMASEA ACQUISITION AND
GROWMAX’S FUTURE
BullRun Capital's tactic of choice appears to be spreading
misinformation about the GrowMax Board and the proposed acquisition
and falsehoods about PrimaSea’s operations in Brazil. Tellingly,
while BullRun has criticized, they have yet to reveal their
intentions for Growmax and its strong cash position. Even in its
report, ISS called-out BullRun for its lack of transparency noting
that “the dissident has not disclosed a detailed business
plan” and “on balance, the dissident has not made a compelling case
for change, thus a vote FOR all management nominees is
warranted.”
Handing over GrowMax and its strong cash position to a new board
with no plan would be a colossal mistake. Your current board has
sourced a transaction and is bringing it to our shareholders for a
vote.
Furthermore, the nominees that BullRun has put forward are not
additive or qualified. None of their nominees have any experience
in the fertilizer or agriculture industry in Latin America, which
are GrowMax’s target industries. Conversely, management’s nominees
collectively have over 100 years of experience in the fertilizer
industry and expertise in the mining, agricultural, finance and
legal sectors.
Shareholders have a clear choice before them: A skilled
independent board executing on a plan including GrowMax’s proposed
transformational acquisition to build value for all shareholders,
over an inexperienced board with a hidden agenda and no
plan.
VOTE YOUR BLUE PROXY TO KEEP GROWMAX ON THE RIGHT
TRACK
To protect your investment and to benefit from the PrimaSea
transaction and to grow value, shareholders are encouraged to vote
only their BLUE Proxy for all of management’s
resolutions including FOR management’s director
nominees and FOR the PrimaSea acquisition.
The deadline to vote is 10:00 a.m. (Calgary time), being 12:00
p.m. (Toronto time), Friday, September 21, 2018.
If you have already voted using another proxy, you may vote
again on the enclosed BLUE Proxy. Only the later
dated BLUE Proxy will count as it supersedes any
previously given proxy. Vote BLUE at
www.proxyvote.com or call Kingsdale Advisors toll free at
1-866-581-1479 or contactus@kingsdaleadvisors.com. There is a team
standing by to help.
Sincerely, Stephen Keith, P. Eng.President and
CEO1.866.581.1479
For more information, please contact:
Stephen Keith, P. Eng.President and CEOTel.: +1
(647) 299 0046Email:
info@growmaxcorp.com www.growmaxcorp.com
Media Contact:Ian Robertson
Executive Vice President, Communication StrategyKingsdale
Advisors
Direct: +1 (416) 867-2333Cell: +1 (647) 621-2646Email:
irobertson@kingsdaleadvisors.com
About GrowMax Resources
Corp.
GrowMax Resources Corp. is a publicly listed
Canadian company holding exploration assets bearing phosphate and
potassium-rich brine resources on its Bayovar Property, which is
located in the Sechura Desert in northwestern Peru.
GrowMax has been focusing its efforts on
leveraging its existing balance sheet to consolidate junior
fertilizer assets in Latin America, targeting projects with
favorable margins and generating cash flow. The Company’s vision is
to become a prominent player in the Latin American fertilizer
industry.
NEITHER THE 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.
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