HOUSTON, Dec. 15, 2011 /PRNewswire/ -- Sasco
Partners, LP (together with its affiliates, "Sasco"), the largest
shareholder of Samex Mining Corp. ("Samex" or the "Company")
(TSX-V: SXG.V) (OTC.BB: SMXMF.OB), today announced that it
delivered an open letter to Samex shareholders. In the
letter, Sasco expressed its deep disappointment with the executive
team's mismanagement, slow pace of drilling, and empty promises to
shareholders. Sasco further shared its concern over the lack
of shareholder representation on the Samex board of
directors. Sasco stated that the status quo is unacceptable
and outlined a plan to seek (i) the designation of the current
President and CEO, Jeff Dahl, as a
Vice President, (ii) the appointment of a seasoned mining
executive as President and CEO, to be based out of Santiago or Copiapo, in close proximity to
Samex' geological team and (iii) the replacement of three of the
current Samex directors. Sasco is optimistic that these
changes will be in the best interests of shareholders and further
speed the Company's exploration progress going forward.
The full text of the letter follows:
December 15, 2011
Dear Fellow Samex Shareholders,
Like you, I was excited to invest in Samex Mining Corp. ("Samex"
or the "Company") because of its impressive Los Zorros property in
Chile and brilliant geological
team. I still am. However, I have come to realize since
my substantial private placement last year that management has not
had the best interests of shareholders at heart. Their
actions have sent the message that they care more about utilizing
shareholder capital for the sake of salary longevity rather than
exploration drilling. As the single largest controlling
shareholder of Samex, with ownership of 29,484,368 shares, or
approximately 23.26% of the outstanding shares, I believe it is in
the best interests of investors to seek changes in the way the
Company does business. I will do my best here to summarize
the main issues thus far and what should be done going forward.
-Despite having well over $9
million in funding for more than a year now, the Company has
averaged just 0.5 rigs of drilling annually. Management only
days ago brought out a second rig after numerous months of constant
pleading from me to finally start spending adequate capital on
drilling. In a similar vein, no serious effort was put into
the recruitment of additional geologists for our exploration team
in Chile until the past few
months. It was only after my numerous phone calls, emails,
and in-person visits, demanding more progress in acquiring
geologists, that the management team got focused on
recruiting. It is no surprise that within a few months we
managed to recruit quite a few bright geologists once the right
strategies were implemented.
-Management's execution pace leaves a lot to be desired in a
world where time is money. In a December 17, 2010 press release, Samex affirmed
it would start drilling on the Nora project "early in the first
quarter of 2011." Yet drilling did not commence until
November 2011, roughly 10 months past
due. Then following completion of the Titan 24 testing in
February of this year, drilling did not resume again until July -
approximately 5 months later. That equates to almost half the
year where no drilling took place, all the while our Company still
had to dole out substantial salary and overhead expenses.
-The Company's transparency and communication with investors is
in dire need of improvement. Furthermore, our corporate
website is quite simply an abomination. It is not only harsh
on the eyes, but does an incredibly poor job of articulating the
Company's prospects. Visitors should be able to clearly see
maps of our projects, drill results, etc. within 30 seconds - as is
the case with websites of almost every other mining
company.
-Management has also forgotten its promises to
shareholders. For example, after my substantial private
placement finalized in November 2010,
Jeff Dahl vowed the funding would
"allow us to not only expand, but accelerate our exploration
efforts." Then, again in a May 3,
2011 letter to shareholders, Jeff
Dahl asserted that the Company was "in a very strong
position to advance our large exploration agenda on a more vigorous
and continuous basis." Clearly, reality has not matched the
rhetoric.
-Aside from Rob Kell, who spends
most of his year in Chile, the
rest of our executives choose to perform their duties largely from
the comforts of their hometown in Abbotsford, Canada. There is no reason
why both our CEO and VP of Operations cannot work in Chile on a full-time basis. Quite
frankly, who can effectively manage a business from another
continent? We need executives with strong dedication in order
to ensure Samex maximizes the efficiency of its exploration agenda
in Chile.
-The composition of the Company's board of directors is severely
lacking by both Canadian and international standards.
Investor interests are not adequately represented by even one seat
on our six-person board. It is my belief that investor
interests should comprise at least half of the board going
forward. After all, we are the owners of the business.
Perhaps if this had been the case all along, more than 90% of our
stock option allowance would not have been generously awarded over
the years largely to individuals who reside full-time in
Canada. Options are a tool to recruit talent to our
Company. They should not be handed out like party favors
amongst friends year after year.
In response to all of this, management may tell you that
patience and understanding are required in exploration. They
may provide a laundry list of excuses as to why certain things have
not been done on time, or even at all. Unfortunately, this is
not a matter of patience and understanding but rather of
performance and accountability. The good news is that these
are all fixable problems. I am interested in solutions for
our Company, not excuses. That is precisely why I have
recently offered management a very effective three-point plan aimed
at solving the above-listed issues:
A) The resignation of Jeff Dahl
from his position as President and CEO. Mr. Dahl would
continue to serve the Company as a Vice President in Canada.
It is my belief that he has been a thoughtful visionary, yet
ineffective executor. A management team cannot successfully
lead from afar.
B) The appointment of a seasoned mining executive as President
and CEO of Samex. This executive would work full-time out of
an office in Santiago or
Copiapo. Their experience and proximity would greatly assist
the geological team in achieving its goals.
C) The appointment of three new directors to replace half of our
current board of directors. These directors would be chosen
by Sasco Partners to represent the best interests of
investors. As a result of such action, we believe that the
actual owners of the business would have an important voice in
critical decisions moving forward.
We believe the status quo will only result in more delays,
dilution, and continued disappointment. We need a team that
is fully dedicated to the mission of drilling our prized projects
in Chile. Now that I have fully explained my viewpoint on
Samex, I hope you will do the same. As the largest
shareholder of Samex, I have already heard strong, supportive
feedback from numerous investors as of late. I will always
welcome calls and emails from fellow investors who are serious
about unlocking the full potential of our Company.
Warmest Regards,
Sasan Sadeghpour
Chief Investment Officer
Sasco Investments, Manager of Sasco Partners
Contact:
Sasco Partners, LP
Sasan Sadeghpour, (713) 956-5200
(ext. 102)
SOURCE Sasco Partners, LP