TORONTO, ONTARIO -- (Marketwired) -- 04/17/13 -- Samara Capital Inc. ("Samara"), a shareholder of Selwyn Resources Ltd. ("Selwyn" or the "Company"), today filed an information circular (the "Samara Circular") urging shareholders of Selwyn to vote for three new director nominees, Mr. Benedict Cubitt, Mr. Justin Oliver and Mr. Jeremy Link (the "Samara Nominees"), as well as David Kwong and Mr. A. Jay Collins, two of the director nominees proposed by Selwyn's management in Selwyn's information circular dated March 22, 2013 (together with the Samara Nominees, the "Samara Slate"), at the annual general and special meeting of shareholders of Selwyn scheduled to be held on April 22, 2013. Proxies in favour of the election of the Samara Slate and against certain other matters to be acted upon at the meeting are being publicly solicited by way of this press release by Samara.
Samara has solicited proxies from Selwyn shareholders that, together with Samara's shares, represent an aggregate of approximately 50% of the issued and outstanding shares entitled to vote at the Selwyn meeting. Such proxies solicited by Samara were solicited by way of private solicitation of a limited number of Selwyn shareholders in compliance with all applicable securities laws.
As stated in the Samara Circular, Samara does not agree with the current Selwyn Board of Directors' decision to invest the proceeds from the sale of the Company's Selwyn Project on the re-start of the ScoZinc Mine. As per Selwyn's Preliminary Economic Assessment ("PEA"), dated December 20, 2012 and filed on the Company's profile on SEDAR on December 21, 2012, the ScoZinc Project has a negative net present value if current zinc and lead prices are used in the assumptions (see page 208 of the PEA). Given the poor financing environment for junior mining companies and the lack of confidence in Selwyn management, Samara believes the appropriate course of action is to return the majority of the proceeds from the sale of the Selwyn Project to shareholders and to put the ScoZinc Project up for sale.
Samara understands that if the proposed Samara Nominees are elected to Selwyn's Board of Directors at the meeting and if Selwyn's transaction with Chihong Canada Mining Ltd. closes, the Samara Nominees intend to cause Selwyn to:
-- Upon settlement of all liabilities of Selwyn, pay out substantially all cash and cash equivalents to the shareholders of Selwyn in the form of a special dividend (or return of capital) as soon as practicable after receiving full payment from the purchaser from the sale of the Selwyn Project. Based on Selwyn's publicly available information, it is estimated that up to $0.10 per share would be available to be returned to shareholders on a pro forma basis.-- Immediately launch a strategic review of the ScoZinc project with the goal of selling the asset and paying out the net proceeds to shareholders, or if possible, selling the entire Company.
The foregoing is based on certain publicly available information, and any unforeseen liabilities could affect the amount of the anticipated payout. The foregoing is subject to the nominees' obligation to act in accordance with their fiduciary duties applicable to directors of a public corporate entity.
Information regarding the qualifications and experience of the Samara Nominees is contained in the Samara Circular.
If appointed as proxyholder, Mr. Benedict Cubitt, a representative of Samara, also intends to vote AGAINST the resolution to fix the number of directors of the board of the Company at six (6), and/or instead put forth a motion for a resolution to fix the number of directors at five (5); FOR the appointment of KPMG as the auditor of the Company to hold office until the next annual general meeting at a remuneration to be fixed by the board of directors; FOR the sale of the Selwyn Project as set out in Selwyn's management information circular dated March 22, 2013 (the "Management Circular"); and AGAINST the resolution to ratify and approve the Company's stock option plan.
Additional Information Regarding Solicitation
In addition to certain non-public solicitations, Samara is publicly soliciting proxies for the Selwyn meeting in reliance upon the public broadcast exemption to solicitation requirements under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102"). The information that follows in this section is provided in accordance with securities laws applicable to public broadcast solicitations.
This solicitation is being made by Samara and not by or on behalf of the management of Selwyn. Samara will bear all costs and expenses associated with this solicitation. However, Samara may determine to seek reimbursement from the Company of its out-of-pocket expenses for the provision of services in connection with this solicitation.
Selwyn shareholders appointing the representative of Samara as their proxyholder at the Selwyn meeting may subsequently revoke such appointment in any manner permitted by law, including any manner outlined in the Management Circular.
The address of Selwyn is Suite 700 - 509 Richards Street, Vancouver, B.C., V6B 2Z6.
Neither Samara nor any of its associates or affiliates has any material interest, direct or indirect, by way of beneficial ownership or otherwise, in matters to be acted upon at the Meeting other than the election of directors.
Samara has filed on Selwyn's company profile on SEDAR at www.sedar.com the following documents in relation to this solicitation: 1) this press release, containing the information required by section 9.2(4)(c) of NI 51-102 and Form 51-102F5; and 2) an information circular, containing the information required by section 9.2(6)(a) of NI 51-102 and Form 51-102F5, in respect of the Samara Slate.
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