Subject: ANNUAL MEETINGS
Concerned Shareholders Requisition Annual General Meeting to Secure Competent Stewardship of MGX Minerals and Enhance Shareholder Value
CALGARY, Alberta, March 09, 2020 (GLOBE NEWSWIRE) -- A group of MGX Minerals Inc. (CSE: XMG) (FKT:1MG) (OTC Pink: MGXMF) ("MGX Minerals" or the "Company") shareholders (the "Concerned Shareholders"), together owning not less than 5% of the issued and outstanding shares of MGX Minerals, announces they have requisitioned an annual general meeting of shareholders of MGX Minerals for the purpose of replacing the board of directors of the Company (the "Board") with a new board capable of ensuring the proper stewardship of the Company. The full text of the requisition is included in this press release as Schedule "A".
Among the principal reasons for this action are:
- Destroyed Shareholder Value. The Concerned Shareholders believe that the Board and management of MGX Minerals have destroyed considerable shareholder value and continue to operate the Company without a clear strategy focused on maximizing shareholder returns. After a period of prolonged value destruction, the Board has shown an inability to reverse continued poor performance nor stop MGX Minerals' share price freefall. This is evidenced by the decline of the Company's share price from its high of CDN$2.00 in January 2017 to CDN$0.085 as of March 6, 2020, representing a decrease of 95.75%.
- Dysfunctional Board and Entrenchment. The Concerned Shareholders are frustrated by the ineffectiveness of the Board in advancing the Company's goals. Rather than focusing on significant issues facing the Company, the Board has been distracted by litigation initiated by two of the directors over the actions of MGX Minerals' CEO, Jared Lazerson, who has misspent Company funds on defending this litigation for the purposes of self-entrenchment.This public infighting and loss of confidence in management has diverted funds and attention from the Company's business, and must be put to an end before further value is lost.
- Potential Misuse of Company Funds and Inadequate Reporting Practices. The Concerned Shareholders have questions regarding the use of Company funds for apparent personal expenses and improper reporting of spending by management and in particular, Mr. Lazerson. This includes the hiring of a personal bodyguard and driver by Mr. Lazerson at a cost of CDN$1,600,000 to the Company. The failure to properly account for expenses, and the use of Company funds in such a manner, does not appear to be in the best interest of the Company or its shareholders.
- Failure to Maintain Lithium Technology License, a Critical Asset to the Company. Management of the Company failed to perform its responsibilities under the technology license agreement with PurLucid Treatment Solutions Inc. ("PurLucid"), pursuant to which PurLucid had granted the Company an exclusive license to use its lithium extraction technology. PurLucid informed management of its default under the agreement and the license has been revoked.
- Damaged Business Relationships. Due to financial mismanagement, MGX Minerals now faces several legal actions and claims for payment from previous project partners. These include clients in lithium rich zones of South America, the United States, and Canada.
- Ineffective Shareholder Communication. The Board and management's poor communication practices and lack of shareholder disclosure is detrimental to minority shareholders and needs to be corrected.
- Potential Dilutive Transactions. The Concerned Shareholders are worried that potential transactions conducted by MGX Minerals in the near future could be highly dilutive and at a material discount to the current share price to the detriment of all shareholders.
- Failure to Address Concerned Shareholder Issues. The Concerned Shareholders have tried to engage with management to resolve these issues, but have largely been ignored to date.
Recognizing the above mismanagement, self-interest, entrenchment, and ineffectiveness of the Board, management and in particular, MGX Minerals' CEO, Jared Lazerson, the Concerned Shareholders seek the removal of all current Board members and the nomination of the following individuals (the "Nominees") to the Board:
Dr. Preston McEachern: Dr. McEachern is a respected leader in mineral extraction and water management technologies in the oil and gas industry with 23 years' experience in solving water treatment challenges. He is actively engaged by clients in advisory roles, holds a faculty position with a Canadian university, and was the Vice President of Research and Development at one of the largest North American oil and gas service companies (Tervita) prior to forming Purlucid Treatment Solutions Inc. Dr. McEachern currently acts as CEO and President of Purlucid Treatment Solutions Inc., a subsidiary of MGX Minerals and the Chief Technology Officer leading MGX Minerals' development to extract minerals from lithium rich brines and waste streams.
Randall W. Keller: Mr. Keller is the former VP of Business Development for MGX Minerals and is credited with the development and authoring of the Company's joint venture agreement with Eureka Resources to become the first ever commercial business to extract lithium from oil and gas produced waters. Prior to MGX Minerals, Mr. Keller was Director of Business Development, Transmission and Land Assets for Berkshire Hathaway Energy Renewables with the Geothermal Division. Mr. Keller currently consults and advises clients in matters regarding heavy civil construction, geothermal brines, mineral extraction opportunities and the renewable energy industry.
Antonio (Tony) Loschiavo: Mr. Loschiavo prepared the preliminary economic assessment for MGX Minerals' Driftwood Creek magnesium project. Mr. Loschiavo is a professional engineer licensed in the province of British Columbia and is well recognized with more than 20 years of practical experience in mining operations and consulting, where he has worked on major projects in Canada, Europe, Russia, China, and Central and South America. Prior to consulting, Loschiavo worked for Rio Algom Ltd. and BHP Billiton, developing mineral projects in North and South America. He holds a BASc. in Mining and Mineral Process Engineering from UBC, and is currently the President of AKF Mining Services Inc. and the VP of Development for Contact Environmental Inc.
David Simmons: Mr. Simmons previously served as an AVP of corporate audit within the banking industry where he held the professional certification of certified internal auditor and worked closely with Bain and Company. Mr. Simmons worked for 20 years with NIKE as a director/general manager in offices throughout Asia, at NIKE's World Headquarters ("WHQ"), advancing to a global director role at WHQ responsible for managing personnel and operations throughout Asia to negotiate and complete several billion dollars in footwear supply contracts annually. Considered an expert in negotiation and dispute resolution with extensive experience in the banking industry, Mr. Simmons received formal training from Willamette University School of Law. Currently retired, Mr. Simmons is dedicated to protecting shareholder rights and ensuring a smooth transition in management.
Lance Arneson: Mr. Arneson is currently employed as a Power Engineer working in the Alberta Oil Sands. He is currently engaged as the control room operator for Suncor Energy Inc.'s base-plant hydro-treaters in Fort McMurray, Alberta, where he operates oil & gas industrial equipment within safe operating limits to obtain upgraded product for the company's sales and storage team. Mr. Arneson is responsible for maintaining and trouble-shooting the operation of the industrial equipment in his control. Prior to his time in the Oil Sands at Suncor, Mr. Arneson had a career spanning 20 years in retail management where he rose to the position of Store Manager for Walmart Stores. At Walmart, he championed customer service and operational excellence. Mr. Arneson led teams through large projects including store renovations and relocations as well as new store build-outs. Mr. Arneson created and executed store budgets to plan and enforced compliance to government and industry standards.
Overall, the Concerned Shareholders have chosen a slate of Nominees who: (1) will work to turn the Company around and seek other needed experts to implement a business plan to maximize shareholder value, (2) are committed to further revitalizing and refreshing the Board and management with highly qualified additional personnel, (3) will seek to deploy the Company's assets in a focused and effective manner, and (4) are committed to communicating to shareholders the status of the Company and it's projects, technologies and plans going forward.
The election of the Nominees should be considered as the initial step to mend shareholder trust amid the value destroying controversy surrounding the Board and management.
MGX Minerals has 21 days from the date of the requisition to call and send notice of an annual general meeting to address the matters raised in the requisition, to be held within four months of the date of the requisition. If MGX does not call an annual general meeting, the Concerned Shareholders will send notice of the annual general meeting to all shareholders.
Lance Arneson and David Simmons, on behalf of the Concerned Shareholders and the Nominees, welcome the opportunity to engage with fellow shareholders. Mr. Arneson can be reached at (780) 381-6510, by e-mail at [email protected] or @Oilsands on https://ceo.ca. Mr. Simmons can be reached at (503) 360-3353, by e-mail at [email protected] or @budmancubfan on https://ceo.ca.
Information Concerning the Nominees
As set out in the requisition, the Nominees are Preston McEachern, Randall W. Keller, Antonio Loschiavo, Lance Arneson and David Simmons. The table below sets out, in respect of each Nominee, his name, province or state and country of residence, principal occupation, business or employment within the five preceding years, and the number of shares beneficially owned, or controlled or directed, directly or indirectly, by such Nominee.
| Name and Province/State and Country of Residence | Present and Past 5 Years' Principal Occupation, Business or Employment | Number of Common Shares Beneficially Owned or Controlled (Directly or Indirectly) |
| Preston McEachern Alberta, Canada | CEO, PurLucid Treatment Solutions Inc., a water treatment company, and President, PurLucid Consulting Ltd., an environmental consulting business | 1,473,328 common shares of MGX 7,436,200 common shares of PurLucid Treatment Solutions Inc., a partially-owned subsidiary of MGX Minerals |
| Randall W. Keller Ohio, USA | Principal of Randall W. Keller Corporation, which provides consulting services for the Lithium, Geothermal and Construction Industries. VP of Development for MGX Minerals from January 1, 2018 to August 15, 2019. Director of Development for Berkshire Hathaway Energy, an energy company, from January 1, 2010 to May 17, 2017 | 16,000 common shares of MGX Minerals |
| Antonio Loschiavo British Columbia, Canada | Principal Mining Engineer, President of AKF Mining Services Inc., an engineering and geoscience consulting firm | None |
| Lance Arneson Alberta, Canada | Power Engineer, Suncor Energy Inc., an integrated energy company | 837,563 common shares of MGX Minerals (1) |
| David Simmons, Oregon, USA | No present or past 5 years' occupation, business or employment | 1,550,000 common shares of MGX Minerals |
Note:
(1) The number of common shares of MGX Minerals held by Lance Arneson was incorrectly stated in the requisition to be 737,563.
Advisors
The Concerned Shareholders have retained Borden Ladner Gervais LLP to act as legal advisors on their behalf.
Contacts
Lance Arneson
Phone: (780) 381 6510
[email protected]
David Simmons
Phone: (503) 360-3353
[email protected]
Additional Information
Information in Support of Public Broadcast Solicitation
The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although the Concerned Shareholders have delivered the requisition, there is currently no record or meeting date set for the meeting and shareholders are not being asked at this time to execute a proxy in favour of the Nominees or any other resolution set forth in the requisition. In connection with the meeting, the Concerned Shareholders may file a dissident information circular in due course in compliance with applicable securities laws.
Notwithstanding the foregoing, the Concerned Shareholders are voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 ? Continuous Disclosure Obligations in accordance with Canadian securities laws applicable to public broadcast solicitations. In connection therewith, certain information regarding, among other things, the Nominees has been provided in this press release under the sections entitled "Information Concerning the Nominees" and in the attached requisition under the section entitled "Nominees".
The information contained herein and any solicitation made by the Concerned Shareholders in advance of the meeting is, or will be, as applicable, made by the Concerned Shareholders and not by or on behalf of the management of MGX Minerals. All costs incurred for any solicitation will be borne by the Concerned Shareholders, provided that, subject to applicable law, the Concerned Shareholders may seek reimbursement from MGX Minerals of the Concerned Shareholders' out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Board.
The Concerned Shareholders are not soliciting proxies in connection with the meeting at this time. The Concerned Shareholders may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholders. Any proxies solicited by or on behalf of the Concerned Shareholders, including by any other agent retained by the Concerned Shareholders, may be solicited pursuant to a dissident information circular or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian corporate and securities laws. Any such proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law.
The registered address of MGX Minerals is located at 6th Floor, 905 W Pender St., Vancouver, British Columbia V6C 1L6. A copy of this press release may be obtained on MGX Minerals' SEDAR profile at www.sedar.com.
SCHEDULE "A"
Requisition of Annual General Meeting of Shareholders of MGX Minerals Inc. ("MGX")
CDS & Co. of 100 Adelaide Street West, Suite 300, Toronto, Ontario M5H 1S3, being the holders of not less than five percent (5%) of the issued and outstanding common shares of MGX that carry the right to vote at a shareholders' meeting (the "Common Shares") hereby requisition the board of directors of MGX (the "Board") to call a meeting of the shareholders of MGX (the "Meeting"), on an expedited basis and by no later than April 11, 2020, for the transaction of the following business:
| 1. | To consider and if thought advisable, to pass four (4) ordinary resolutions to remove each of the following incumbent directors of the Board (each, a "Removal Resolution"): Jared Lazerson Andris Kikauka Michael Reimann Lyndon Patrick |
| 2. | If any Removal Resolution is passed, to consider and if thought advisable, to pass an ordinary resolution fixing the size of the Board at five (5) directors (the "Board Size Resolution"); |
| 3. | If any Removal Resolution is passed, and if thought advisable, to pass five (5) ordinary resolutions electing each of the following nominees as directors of the Board to fill the vacancies created by the Removal Resolutions and the Board Size Resolution (each, an "Appointment Resolution"): Preston McEachern Randall W. Keller David Simmons Lance Arneson Antonio Loschiavo |
| 4. | The transaction of such other business as may properly come before the Meeting. |
With respect to the Appointment Resolutions, if the number of nominees for such election of directors is greater than the number of vacancies created by the Removal Resolutions and the Board Size Resolution, then those nominees receiving the greatest number of votes will be declared elected until all such vacancies have been filled, and if the number of such nominees for election is equal to the number of vacancies to be filled then all such nominees will be declared elected.
In the event that the Board fails to call the Meeting within 21 days after receiving this Requisition, the Board is hereby notified that the undersigned will call the meeting. This Requisition is made pursuant to Section 167 of the Business Corporations Act (British Columbia).
The undersigned hereby represent and warrant that, together, they are the holders of not less than five percent (5%) of Common Shares.
This Requisition instrument may be executed in counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Requisition instrument by telecopy or other electronic transmission shall be effective as delivery of a manually executed signature page of this Requisition instrument.
DATED this 6th day of March, 2020.
CDS & CO.
"Johann Lochner"
___________________________________
Name: Johann Lochner
Title: Director
"Lucy Mullins"
___________________________________
Name: Lucy Mullins
Title: Manager
EXHIBIT "1"
Nominees
| Name and Province/State and Country of Residence | Present and Past 5 Years' Principal Occupation, Business or Employment | Number of Common Shares Beneficially Owned or Controlled (Directly or Indirectly) |
| Preston McEachern Alberta, Canada | CEO, PurLucid Treatment Solutions Inc., a water treatment company, and President, PurLucid Consulting Ltd., an environmental consulting business | 1,473,328 common shares of MGX 7,436,200 common shares of PurLucid Treatment Solutions Inc., a partially-owned subsidiary of MGX |
| Randall W. Keller Ohio, USA | Principal of Randall W. Keller Corporation, which provides consulting services for the Lithium, Geothermal and Construction Industries. VP of Development for MGX from January 1, 2018 to August 15, 2019. Director of Development for Berkshire Hathaway Energy, an energy company, from January 1, 2010 to May 17, 2017 | 16,000 common shares of MGX |
| Antonio Loschiavo British Columbia, Canada | Principal Mining Engineer, President of AKF Mining Services Inc., an engineering and geoscience consulting firm | None |
| Lance Arneson Alberta, Canada | Power Engineer, Suncor Energy Inc., an integrated energy company | 737,563 common shares of MGX |
| David Simmons, Oregon, USA | No present or past 5 years' occupation, business or employment | 1,550,000 common shares of MGX |
To the knowledge of the Concerned Shareholders, no Nominee is, at the date hereof, or has been, within ten (10) years before the date hereof: (a) a director, chief executive officer or chief financial officer of any company that (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation that was in effect for a period of more than thirty (30) consecutive days (each, an "order"), in each case that was issued while the Nominee was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to an order that was issued after the Nominee ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer; (b) a director or executive officer of any company that, while such Nominee was acting in that capacity, or within one (1) year of such Nominee ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (c) someone who became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of such Nominee.
To the knowledge of the Concerned Shareholders, as at the date hereof, no Nominee has been subject to: (a) any penalties or sanctions imposed by a court related to securities legislation, or by a securities regulatory authority, or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a Nominee.
Other than as described below, to the knowledge of the Concerned Shareholders, none of the Concerned Shareholders or director or officers of the Concerned Shareholders, or any associates or affiliates of the foregoing, or any of the Nominees or their respective associates or affiliates, has: (a) any material interest, direct or indirect, in any transaction since the commencement of MGX's most recently completed financial year or in any proposed transaction which has materially affected or will materially affect MGX or any of its subsidiaries; or (b) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the Meeting, other than the election of directors.
Preston McEachern owns, directly or indirectly, 100% of the issued and outstanding shares of PurLucid Consulting Ltd. ("PCL"). PCL owns 38% of the issued and outstanding shares of PurLucid Treatment Solutions Inc. ("PTS"), a partially-owned subsidiary of MGX. MGX owes PTS approximately CDN$1,100,000 in connection with a lithium technology development license agreement between the parties (the "License Agreement") from the commencement of the financial year ended July 31, 2019 to January, 2020 (the "Unpaid Amounts"). While the License Agreement was cancelled in January, 2020, the outstanding Unpaid Amounts remain due and payable.
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