Welcome!

Microsoft Cloud Authors: Liz McMillan, Elizabeth White, Mihai Corbuleac, Pat Romanski, David Bermingham

News Feed Item

St. Elias Warns Shareholders: Dissidents Want Reprimanded Financial Salesperson On the Board And Have Failed To Provide Adequate Disclosure

Shareholders Should Rely On The Facts, Not Unfair Criticisms

VANCOUVER, British Columbia, Dec. 13, 2012 /PRNewswire/ -- St. Elias Mines (TSX-V: SLI) (U.S. Clearing Symbol: SELSF) (Frankfurt Exchange: EKL) today responded to a dissidents' circular issued by Gilby Len Hastman and Darcy Kim Hastman. Based on a preliminary assessment, St. Elias believes the dissidents' disclosure is inadequate and that the dissident nominees do not deserve shareholder support.

St. Elias believes that the biographies in the dissident circular confirm that none of the five dissident nominees should be elected to the Board. Four of the five do not have mineral exploration, corporate finance or public markets experience. This alone should be enough to alarm shareholders but there are even more serious issues with the fifth dissident nominee, James Rainbird, a reprimanded financial salesperson.

The dissidents want Mr. Rainbird on the St. Elias Board despite his admitted past misconduct. As disclosed in the dissidents circular, as a result of his transgression the Mutual Fund Dealers Association of Canada (MFDA) in 2010 not only reprimanded him but also prohibited him for five years from acting in a supervisory capacity for any MFDA members. 

However, the dissidents failed to disclose the nature of Mr. Rainbird's misconduct, which involved hundreds of victims, millions of dollars and flagrant breaches of securities laws over a period of four years. This omission is very misleading. Only with a full description of the transgression can shareholders begin to understand the depths of the problems that St. Elias may face under the control of the dissidents.  

"Shareholders should be concerned," said Lori McClenahan, President and CEO of St. Elias Mines. "The details of Mr. Rainbird's infraction suggest that he is not capable of identifying and managing risk and may not act in the best interests of St. Elias shareholders. Even worse is the failure by the dissidents to disclose these details. This must be corrected immediately. What else are the dissidents hiding? And what does this say about the dissidents' likely conduct if they were on the St. Elias board?"

Continued Ms. McClenahan, "The dissidents have not provided any details of how they intend to advance St. Elias' portfolio of high potential properties, nor do they have proposed a management team to operate St. Elias or the ability to raise capital. The combination of inadequate disclosure, lack of plans and inexperience means that the dissidents do not deserve shareholders' support."

Details of James Rainbird's Reprimand and Transgression

Mr. Rainbird was reprimanded by the MFDA even though he cooperated with its investigation and admitted to misconduct. He is prohibited for five years from acting in a supervisory capacity as a mutual fund salesperson. The MFDA demonstrated its lack of confidence in Mr. Rainbird by also requiring that he be subject to retraining and a six-month period of "close supervision."

According to MFDA disciplinary documents that the dissidents did not disclose, Mr. Rainbird, four associates and various others under their supervision sold to 656 clients a total of $50.2 million of high-risk debentures issued by a company called FactorCorp. Financial Inc. The sales occurred between June 25, 2003 and April 1, 2007. Shortly afterward, FactorCorp went bankrupt.

Mr. Rainbird personally sold the debentures to 167 clients and 7 people that he supervised sold the debentures to 226 clients. For virtually all of these clients the purchase was unsuitably risky, based on "know-your-client" information collected at the time of purchase. According to the MFDA, these debentures could only be sold to wealthy or sophisticated investors who qualified for an accredited investor exemption. At the time of purchase, none of these clients qualified.

These details and more are described in the MFDA disciplinary documents, which shareholders can find at www.steliasmines.com under the AGM tab and at the MFDA website under http://www.mfda.ca/enforcement/cases08/200827.html. St. Elias urges shareholders to read these disciplinary documents carefully.

Why shareholders should be concerned

Given that Mr. Rainbird and his fellow-dissidents are now standing for election to the Board of a high-risk junior mineral exploration company, St. Elias believes the details of the transgression, and the dissidents' failure to fully disclose it, is disturbing. The dissidents attempted to downplay the gravity of Mr. Rainbird's transgressions by referring to them only as "allegations [that] were centered around the aspects of inadequate training, compliance and supervision."

Shareholders of St. Elias deserve more fulsome disclosure from the dissidents. Shareholders should also be troubled by dissidents' hypocrisy, given the high disclosure standard that the dissidents are suggesting they will establish. In their circular, the dissidents claim that their vision is based first and foremost on "timely, open and candid communications with the shareholders."

Clearly, the dissidents have already failed to meet their own standard. They have made the decision that candid communications excludes a description of Mr. Rainbird's misconduct. They think shareholders don't need to know. We think this disclosure decision by the dissidents is strong evidence that they don't deserve your vote.

The inadequate experience of the other four dissident nominees

As noted above, St. Elias believes the experience of the other four dissident nominees is sorely lacking. None of them have disclosed any experience in mineral exploration. St Elias also notes that:

  • Dissident nominee Ted Rutherglen has held five jobs in the past six years and his career has moved steadily backwards. Since 2011 he has had the title of Manager, a more junior position than Director, the title he had from 2007 to 2011 and also more junior than the title of Vice President, which he held for less than a year between 2006 and 2007. His career path does not invite investor confidence.
  • The experience of dissident nominees Gilby Len Hastman and Darcy Kim Hastman involves a closely-held electrical contracting business and the experience of dissident nominee Richard Alexander Defreitas involves a closely-held oil services business. These businesses have little or no relevance to St. Elias, a publicly-traded mineral exploration company.
  • In addition to downplaying Mr. Rainbird's inappropriate conduct, the dissidents made a misleading claim in Mr. Rainbird's biography regarding his role at Intigold Mines. The Circular states that Mr. Rainbird. was the President and Chief Executive Officer of the TSXV-listed Intigold Mines Ltd. ("Intigold") from August, 2007 to December, 2010, and claim that he was also the Founder of Intigold. This is false. Mr. Rainbird was not the Founder of Intigold and was only the President and Chief Executive Officer of Intigold Mines Ltd. from October 26, 2010 to December 3, 2010, a period of about 5 weeks.
  • Mr. Rainbird and Mr. Defreitas are not eligible for election under the Company's articles because they failed to provide their consent to act as directors of the Company within the specified time frame.

The dissidents don't have a plan for St. Elias, just criticism

The dissidents have not provided any plans for St. Elias and don't say who will lead the Company.  Meanwhile, the dissidents have leveled unfair criticisms at the Company's nominees and management. Members of this team have assembled St. Elias' impressive portfolio of mineral properties and have acted prudently to explore and finance them.

In the mineral exploration business there is always a risk that drilling results will disappoint. The key is to know when to adjust strategies as new facts emerge. This is precisely what the Board and management of St. Elias has done, specifically with regard to the Company's flagship Tesoro gold project in Peru.

Nowhere do the dissidents say how they would advance the Company's high potential exploration properties. In fact, nowhere in their materials do they even mention that St. Elias is a mineral exploration company.  They also deliberately distance themselves from the operations of the Company, saying that all of the dissident nominees will be independent and none expect to be employed by the Company.

St. Elias has not hidden a gold discovery

According to internet conspiracy theorists who appear aligned with the dissidents, St. Elias has fraudulently hidden a giant gold discovery at Tesoro. It is only possible to jump to such an absurd conclusion if the critic doesn't have any knowledge of how value is created in mineral exploration. 

Consider these facts:

  • Management disclosed accurate and full drilling results in compliance with the National Instrument 43-101 rules that govern mineral exploration disclosure. The results were disappointing but accurate.
  • If the deep drilling at Tesoro had really discovered a giant gold deposit, it would have been in management's best interest to disclose it.  Disclosing positive results would have enhanced the value of St. Elias and opened up potential new opportunities to advance the Company and its properties.
  • Management stopped its deep drilling program at Tesoro because it was the responsible thing to do when early results did not live up to expectations.
  • The 3D geophysical images that showed anomalies at Tesoro were tools to inform mineral exploration. However, one cannot really know what is in the ground before drilling commences.
  • In the months following the decision to stop deep drilling at Tesoro, St. Elias has sought expert advice to inform a new exploration and development strategy. St. Elias expects to disclose more about that strategy to shareholders once fully developed and likely prior to the Annual General and Special Meeting.

St. Elias: successfully financed in challenging conditions

St. Elias raised $13 million in challenging market conditions over the past three years and has prudently deployed its capital. This is a significant accomplishment that speaks to the experience of the management team and potential of all of the Company's exploration projects. The dissidents claim that these funds have been misused for promotion. Consider these facts:

  • Exploration is a capital-intensive business. Management needs to take a long-term view and ensure that there is a steady pipeline of funding to advance future phases of exploration. This requires outreach to a wide net of potential investors, which calls for travel and marketing efforts.
  • The dissidents' criticized St. Elias for increasing costs over the four-year period ended May 31, 2012 but failed to mention this took place during a period of significantly increased exploration activities. In fact, for the year ended May 31, 2012 exploration expenses totaled $5.2 million, up 1,860% from $266,074 in the year ended May 31, 2009. It was unfair and misleading of the dissidents to isolate travel and operating costs without mentioning the corresponding increase in exploration activity.

Vote for an experienced and capable Board

The nominees put forward by the Company are experienced and capable. Under their supervision, the current management team will advance our exploration properties and raise awareness of St. Elias in a prudent and measured fashion – all with a view to surfacing value for our shareholders.

  • Don't put your faith in dissidents who omit crucial details from their disclosure, whose only nominee with any public company experience is a reprimanded financial salesperson, and who won't - or can't -provide any exploration of financing plans for the Company.
  • Recognize that investing in a junior exploration business comes with risks. Opt for a Board that has the right experience and is capable of minimizing risk and maximizing the opportunities ahead.

This is not a short-term game. The Board and management of St. Elias are in it for the long-term and remain committed to creating value for our shareholders. Please vote your WHITE proxy today.

Vote the WHITE proxy for an experienced board

Please review the Management Information Circular at www.steliasmines.com or www.SEDAR.com and vote only the WHITE proxy. Vote today. If you have questions or seek assistance with voting your WHITE proxy, please call our proxy solicitation agent, Georgeson toll free at: 1-888-605-8412 or [email protected].

About St. Elias
St. Elias is a gold-focused exploration company led by an experienced management team and active in Peru and British Columbia. St Elias' properties have high potential and are located in two of the most prolific mining regions of the world. For additional information on St. Elias and its projects, please visit us at www.steliasmines.com or call Danny Aaron at 1-888-895-5522 (toll free US and Canada).

If you have questions or need assistance voting your shares, contact our proxy solicitation agent, Georgeson Shareholder Communications Canada Inc. at 1-888-605-8412 (North American toll free) or email: [email protected].

ST. ELIAS MINES LTD.

(signed "Lori McClenahan")
Lori McClenahan, President, CEO and Director

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This News Release may contain forward-looking statements including, but not limited to, comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

For more information contact:
St. Elias Mines LTD.
P: (604) 669-4677
Toll Free: 1-888-895-5522

SOURCE St. Elias Mines Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
Korean Broadcasting System (KBS) will feature the upcoming 18th Cloud Expo | @ThingsExpo in a New York news documentary about the "New IT for the Future." The documentary will cover how big companies are transmitting or adopting the new IT for the future and will be filmed on the expo floor between June 7-June 9, 2016, at the Javits Center in New York City, New York. KBS has long been a leader in the development of the broadcasting culture of Korea. As the key public service broadcaster of Korea...
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit y...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will discuss the vast to...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
SYS-CON Events announced today the How to Create Angular 2 Clients for the Cloud Workshop, being held June 7, 2016, in conjunction with 18th Cloud Expo | @ThingsExpo, at the Javits Center in New York, NY. Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified. Now it’s a component-based well-performing framework. The immersive one-day workshop led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and...
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
IoT generates lots of temporal data. But how do you unlock its value? How do you coordinate the diverse moving parts that must come together when developing your IoT product? What are the key challenges addressed by Data as a Service? How does cloud computing underlie and connect the notions of Digital and DevOps What is the impact of the API economy? What is the business imperative for Cognitive Computing? Get all these questions and hundreds more like them answered at the 18th Cloud Expo...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
SYS-CON Events announced today that 24Notion has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. 24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to con...
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...