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Concerned Shareholder of Auro Resources Corp. Wishes to Correct Misleading Information in Press Releases Filed by Management
By: Marketwired .
Dec. 24, 2012 06:37 PM
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/24/12 -- Shareholders of Auro Resources Corp. (the "Company"), please take notice that:
Earlier today, management of the Company issued two news releases containing erroneous and misleading information.
In the first release, management of the Company (the "Management") reported on the outcome of an injunction application in the Supreme Court of British Columbia (the "Court") on Friday December 21, 2012 in the litigation proceeding involving Andrew Williams, a shareholder of the Company, (as Petitioner) and the Company as well as four directors of the Company (as "Respondents"). The management news release incorrectly suggested that the entire litigation proceeding against the Respondents was dismissed by the Court. Only the injunction application was dismissed by the Court on December 21, 2012.
Mr. Williams is a beneficial owner of 972,500 common shares of the Company, and he commenced the litigation against the Respondents by filing a petition in Court (the "Petition") on December 19, 2012. For more information regarding the application and the Petition, please see the news release "Shareholder of Auro Resources Corp. Files a Petition in the Supreme Court of British Columbia Against Company and Its Directors" filed by David Elliott, as the Concerned Shareholder, on December 21, 2012.
On December 19, 2012, Mr. Williams commenced a proceeding against the Respondents, seeking relief due to oppressive and unfairly prejudicial conduct by the Respondents to Mr. Williams as a shareholder. As part of that proceeding, Mr. Williams made an application to the Court on December 21, 2012 for certain interim injunctive relief, from the date of the hearing to the date of the upcoming annual general and special meeting of the shareholders of the Company to be held on January 3, 2012 (the "AGM"). It was that injunctive relief application alone that was dismissed by the Court, on the basis that any damages suffered by Mr. Williams during that period of time could be compensated through an award of damages.
The Concerned Shareholder wishes to make clear that no decision was made by the Court in relation to Mr. Williams' Petition, which was not ruled upon by the Court, contrary to what was implied by the Management news release. Mr. Williams intends to pursue that Petition against the Respondents, and will not be abandoning any aspect of that Petition.
The second news release issued by the Management earlier today responded to the information circular (the "Dissidents Information Circular") and certain press releases filed by David Elliott, a Concerned Shareholder of the Company. The Concerned Shareholder believes that this release also contains erroneous and misleading information.
Throughout their two press releases, Management implies that the Concerned Shareholder is responsible for putting in the prior management of the Company, which was replaced on November 16, 2012. These statements are not true. John Gomez, the prior CEO of the Company, was previously CEO of White Gold Corporation, which was acquired by the Company in July 2011. Mr. Gomez became part of the management of the Company by virtue of his previous role in White Gold Corporation and not through the actions of the Concerned Shareholder. Furthermore, Mr. Gomez does not form part of the slate of directors proposed by the Concerned Shareholder.
Management also implies that it was the previous Management under Mr. Gomez that was responsible for the problems raised by the Concerned Shareholder. These implications are entirely unfounded. Mr. Gomez became the CEO of the Company on June 18, 2012, only six months prior to the date of the Dissident Information Circular. The share price of the Company, on June 18, 2012, was $0.04. This represents a drastic decline of 85% from the share price of $0.26 in December 2010. This decline represents 96% of the decline mentioned by the Concerned Shareholder under the heading "Reasons for a Change of Management" in the Dissident Information Circular.
The Concerned Shareholder would like to underscore that the following Management nominees were involved with the Company during the entire period of decline mentioned above:
-- Mark Lawson - Chief Executive Officer of the Company from October 3, 2008 to June 18, 2012 and a Director of the Company since October 3, 2008; -- Len Davies - Chief Financial Officer of the Company from September 20, 2006 to November 16, 2012 and a Director of the Company since September 19, 2006; and -- Mario Concha - Director of the Company since November 4, 2008.
The problems raised by the Concerned Shareholder have been persistent for a number of years and Management has no factual basis for implying that the problems were caused by the recent actions of Mr. Gomez.
Certain language in the Management press release suggests that the Concerned Shareholder was part of the prior management of the Company. The Concerned Shareholder would like to clarify that he has never been, nor does he intend to be, a member of the management or the board of directors of the Company.
Management suggests that the Petition filed by Andrew Williams was intending to "temporarily financially cripple" the Company. On November 7, 2012, the Concerned Shareholder, Mr. Williams, and their investment group purchased 13,832,583 common shares of the Company by investing approximately $415,000 to keep the Company financially viable by allowing it to make payments on its Colombian properties and supplying it with much-needed working capital. The Concerned Shareholder has no incentive to "financially cripple" the Company and has only shown the opposite intention by investing approximately $415,000 in the Company. By contrast, Management made no investment in the November 7 private placement, and reportedly holds an aggregate of 56,000 shares of the Company, which represents an estimated investment of only $1,500 based on today's closing price. As evidenced by their shareholdings, the interests of Management and the current directors do not align with those of shareholders.
Management attempts to discount its, and current directors', responsibility for setting the record date for the AGM at two days prior to the closing of the placement of 13,832,583 common shares of the Company. The majority of the directors of the Company approved both the information circular for the AGM, and the record date. In their first press release, Management also attempts to discount its, and current directors', responsibility with respect to the private placement that closed November 7, 2012. Management claims that "none of the present management and none of the named directors had dealt with the private placement and the Exchange." This claim by Management is misleading as it ignores the fact that the directors voted to approve the private placement and therefore must have had an appreciable degree of involvement with the placement as part of their responsibilities as directors.
Management claims that Doug Dray, current Chief Financial Officer of the Company, agreed that the Company needs "a professional and seasoned team to step forward and lead the Company." This statement is not supported by the actions of Management, as three of the four Management nominees are current directors.
The Concerned Shareholder believes the news releases filed by Management earlier today contain misleading statements, and that this is further evidence of the management attempting to entrench itself by any means.
On December 20, 2012, the Concerned Shareholder of the Company announced that he has filed the Dissidents Information Circular with Canadian securities regulators and has initiated a proxy solicitation process with the objective of having a new board of directors elected at the AGM. Copies of the Dissidents Information Circular have been mailed to shareholders and are available online at www.sedar.com under the Company's profile, or by contacting Laurel Hill Advisory Group.
The Concerned Shareholder encourages the shareholders of Auro Resources to vote their GREEN proxy prior to December 28, 2012 at 5:00pm Pacific Time. You may support the Concerned Shareholder in this way even if you have already completed and signed a white proxy distributed to you by management of the Company. YOU MAY CHANGE YOUR VOTE BY SUBMITTING A GREEN PROXY WITH A LATER DATE. A LATER DATED GREEN PROXY AUTOMATICALLY REVOKES ANY EARLIER PROXY. If you have any questions or need assistance in voting your shares please contact the Concerned Shareholder's proxy solicitation agent, Laurel Hill Advisory Group 1-877-452-7184, collect 416 304-0211 email: firstname.lastname@example.org.
David Elliott, Concerned Shareholder
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