HOUSTON, Dec. 22, 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), today announced that it has delivered a
follow-up letter to Samex shareholders responding to numerous false
and misleading statements from yesterday's public statement issued
by the Company.
The full text of the letter follows:
December 22, 2011
Dear Fellow Samex Shareholders,
We have reviewed the statement released yesterday by Samex Mining
Corp. ("Samex" or the "Company"). Sadly, management and the
Board of Samex have decided to conveniently omit numerous facts and
misdirect shareholders yet again. This is precisely what
happens when a group with a track record of numerous failures is
confronted with reality. The fact is that Sasco has openly
expressed to management its repeated disappointments with their
recent performance via emails, conference calls and through
in-person visits.
Recently, upon receiving our list of demands aimed at advancing
shareholder interests and enhancing shareholder value, the Board
decided to form an "independent committee" consisting of four
current Samex directors. According to Samex's most recently
filed information circular, two of these individuals are
non-independent directors and thus, this so-called "independent
committee" is not even composed of a majority of independent
directors. This is yet another example of the corporate
governance issues plaguing the Board and Samex. We do not
have trust that this committee is capable of independent reflection
and judgment on the serious concerns and demands we have
raised.
Unfortunately, present management is growing ever more desperate to
maintain the status quo and consequently appears willing to stoop
to new lows at the expense of shareholders. Without further
ado, we will examine the six main points raised by the Company in
its "Samex Answers Sasco" press release dated December 21, 2011 and show you why the current
Board is not to be trusted:
1) The Company would have you believe that Sasco "may"
have breached a confidentiality agreement.
This disingenuous attempt by management to imply that I have
somehow violated a recent confidentiality agreement is extremely
dishonest. This standard agreement that management is
alluding to was signed before my visit to Chile in November. As management knows
well, upon Samex's recent press release detailing all exploration
activities, all material information learned during my trip became
publicly disclosed. Therefore the Board's unfair allegation
that I "may now be in breach" of this agreement was a
deliberately deceitful use of words to misdirect the public, while
not taking responsibility for a false accusation. Then, in
yet a further display of legal ineptitude, the Board claimed my
letter's assertion of a non-independent board was both "utterly
false and completely slanderous". Unfortunately, the term
slander applies to spoken words, while libel is the correct term
for written words. Clearly, our Board is unaware of even the
most basic legal considerations, much less the definition of the
word "independent," as noted above.
2) The Company criticizes Sasco for not agreeing to enter into
highly uncustomary and restrictive lock-up agreements that would
have insulated and entrenched the Board and management.
We find it laughable that the Company is actually criticizing
Sasco for not agreeing to guarantee Jeffrey
Dahl's job security for the next 5 years. On an equally
misguided note, the Board has also decided to raise the issue of
their so-called voting agreement. As my private placement was
being completed, Jeffrey Dahl's main
concern was whether or not his job would remain safe and secure in
the future. He brazenly asked for a written guarantee that
this would in fact be the case. I informed him that while I
did not anticipate removing management or the Board, I would need
to see them perform for some time before even considering signing
any document of the sort. We then exchanged a few ideas in
drafts, but nothing was ever executed. Ask yourself why Mr.
Dahl did not make signing such a highly restrictive and uncustomary
document a prerequisite for the private placement if it had already
been agreed upon. Clearly, Jeffrey
Dahl and the Board were trying to avoid accountability for
their failures. Unfortunately as 2011 progressed, I realized that
management was not keeping their word on even the most basic of
considerations. As a result, I eventually decided it would
not be in the best interests of shareholders to sign such a
document guaranteeing management and the Board's job security
regardless of actual performance. In fact, I even made this
very comment to Jeffrey Dahl in
person during my September visit. If he had any issues with
my position on this matter, then why was I allowed to return to the
property again in November?
3) The Company's statement that Sasco thinks it "can run our
drill programs better than our professional geological team"
does not make any sense.
How would this allegation make any sense when I have had nothing
but praise for Rob Kell and his team
in Chile? Our primary issue has been with management not
allocating the adequate and appropriate resources in a timely
manner to assist our geological team in the field. This is so
critical because we are strongly of the opinion that once enough
drilling is completed at Los Zorros, a legendary discovery can be
made.
The Company also states that Sasco has "no experience or
qualifications in geology," thereby somehow implying that we are
not welcome to voice our concerns with the direction of
Samex. How ironic is this statement considering the Company's
entrenched CEO is a former stockbroker and fruit farmer without a
college degree? Our position has always been that Samex needs
a qualified industry veteran to manage its affairs. My firm
has been working diligently via industry contacts to find
accomplished executives and Board candidates with proven track
records of success. In this respect, we are presently
evaluating several strong candidates who have had long tenure with
major mining companies and started successful junior mining
ventures.
4) The Board would have you believe that it adequately
represents the best interests of shareholders.
The Samex Board's track record speaks for itself. Do you
know of any other junior mining company that still has the same
board intact after 16 years of failed execution, extensive share
dilution, and not even a single proven ounce of resources to speak
of? How can management be proud of this legacy of
failure? What's even more confusing is their declaration to
be ethical because option grants have never reached 10% of
outstanding shares. The issue here is not one of quantity but
of quality. For example, why should the Abbotsford management have been awarded even a
single option in 2009 after nearly driving Samex into bankruptcy
the year before? Jeffrey Dahl,
his father Peter Dahl, Larry McLean, his wife Brenda McLean, and Allen
Leschert were awarded approximately 2,100,000 options in
September 2009. Such action appears not only highly unethical
to us, but also appears to be in direct disregard of their
respective fiduciary duties to shareholders. In fact, Samex
presently has less than just 1% of its outstanding shares available
to issue as options for new employees. This handicap will
almost certainly leave Samex at a disadvantaged position if the
Company needs to further expand its operations. Shareholders
need an independent and re-constituted Board that is not composed
of management and their personal friends, or the unabashed abuses
of power will continue unabated.
5) Management claims that Sasco's comments on hiring new
geologists and drill rigs are misleading.
Apparently, Jeffrey Dahl and his
colleagues are bewildered when I quote their very own press
releases. Perhaps that is because their projections have a
checkered history and are utterly unreliable. The simple fact
is that anyone can look up both their December 17, 2010 as well as July 8, 2011 press releases, which are two
separate issues. They did not drill Nora when promised, but
also by their own admission, they did not even have a single rig on
Los Zorros for many months in 2011. There is nothing
"confusing" about these facts as management tries to claim.
Additionally, management's claim that they had been
"actively recruiting geologists throughout 2011" does not reflect
reality. From January 2011
until September 2011, Samex only
hired 1 new geologist. Then after a visit in September 2011, when I strongly urged management
to put a serious effort into recruitment with new strategies, Samex
managed to hire two more geologists within just two
months. One would hardly call this a mere
coincidence.
6) The Board defends the practice of allowing its highest-paid
executives to live most of the year in Abbotsford, Canada.
It remains tremendously disappointing that the Company is still
trying to justify its hands-off approach. The simple fact is
that Samex does not need to allocate the lion's share of its salary
expenditures to individuals living in a small Canadian town.
Our Company is perfectly capable of having just a few
administrative employees remain in Canada full-time to handle regulatory related
matters. The plain fact is that our CEO and VP of Operations
choose to remain in Abbotsford
because it allows for a more convenient lifestyle than does living
away from their families in Chile. Next time you are lucky
enough to have management actually return your phone call, please
be sure to ask them exactly how many salaried employees work in the
Abbotsford office, as well as how
much each one is earning annually.
Lastly, as far as our website is concerned, Mr. Dahl once again
does not have his facts straight. His stated belief that I
was content with the site is reference to a joke I made upon one of
my visits. Sadly, even Mr. Dahl admitted that the website was
a "source of embarrassment" for many years. It is truly
inconceivable that anyone could have been satisfied with the stale
and confusing nature of our prior site, and unfortunately our "new
website" is merely a simple design modification. Visitors
cannot even see detailed maps of our projects or clear visuals of
our drill results. These are essential facets of any
exploration company's website, and any management with the
slightest bit of industry experience would certainly understand
this.
In conclusion, both the Board and management of Samex have wasted
valuable time, have misallocated Company resources, and have
further expanded upon their own legacy of poor performance.
They will do everything in their power to continue distracting the
public from their abysmal track record. You don't even have
to take our word for it - their 16 year track record is out in
plain view for everyone to see, and it's hardly anything to
celebrate. The reality is that Jeffrey Dahl, along with his father and friends,
have run Samex as if it were their private company for the better
part of two decades. This management clearly needs to change,
and the time for change is now.
Moving forward, Sasco will continue working hard to find our
Company the proper management and Board team that is desperately
required to unlock shareholder value and the full potential of
Samex. If incumbent management wishes to remain "suspicious"
of our motives, they are welcome to do so. We are the largest
shareholder of Samex and do not receive salary or options of any
kind from the Company. Our interests are directly aligned
with yours as shareholders. Like all other shareholders, we
only benefit if our Company succeeds in its exploration
activities.
We would like to thank you for taking the time to hear our
viewpoints and encourage you to make your own and informed
decisions about what is truly best for Samex. Many
shareholders continue to contact us and provide their valuable
input during this important time. We want to assure everyone
that we are only concerned with promoting all shareholder interests
and enhancing shareholder value.
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