OTTAWA, Oct. 23, 2017 /CNW/ - Dear Board of
Directors,
I first of all would like to applaud how the Board and
Management has navigated Altai Resources Inc. "Altai" (TSXV: ATI)
through the difficult period of the past six years since the
Quebec government imposed their
moratorium on oil and gas exploration in 2011. In essence, from
that period Altai was essentially placed into a dormant stage with
the sole intent of conserving liquidity and working capital. In
addition, I do applaud that the CEO has not taken a salary during
this period and there have not been any dilutive shares issued
during this period.
In light of the above, over the past three years as a long-term
shareholder of Altai, I have openly attempted to engage Management
on numerous occasions with the sole intent of surfacing and
creating additional shareholder value for all shareholders.
For the record, I have been a shareholder in Altai for over 3
years, and currently own 5.0% of the public common share
float. Unfortunately, my efforts have come to no avail.
At the current time, with the recent developments of
Quebec's Bill 106 passing and
preliminary new regulations on exploration forthcoming the
Quebec government's intent to
begin some form of oil and gas production has changed the landscape
in Quebec for the
positive. In light of this, there isn't any better time than
now for Altai to awaken to the current realities and act in manner
that clearly reflects the best interests of all
shareholders. I am disclosing that I have gathered the support
from a Group of additional 25 independent shareholders both from
North America and Europe who collectively own 4.4 million common
shares as well. In summary, together we currently control 15.2% of
the public common share float.
I, Jonathan Mastromattei, would
like to be given the opportunity to be nominated for a board seat
in the upcoming 2018 Annual General Meeting. In addition, I have
highlighted a list of well-intentioned proposals that I feel will
be in the best interests of all shareholders, management and
company insiders. I, along with the Group "We", believe that
these proposals will allow the company to trade at comparable
multiples to its peers in the Quebec oil and gas exploration and production
space.
- Altai needs to update their website and make ever effort to
post a new corporate presentation.
- Since the Bill 106 release, multiple Quebec based oil and gas companies have stated
their future plans for 2018. We would like Altai as well to
communicate with shareholders on what their plan is with the
company's Quebec natural gas
property.
- We would like the company to provide further detail on its'
conventional gas acreage versus its' non-conventional acreage.
- In past years, Altai has spent over 25
million dollars on its Sorel Trois-Rivieres natural gas
property and since the moratorium these properties have been
written down to one dollar.
Every year since the write down, Management has indicated in their
Management Discussion and Analysis report filings that the Sorel
Trois-Rivieres properties are still a promising project for the
future. Furthermore, that the value of the impaired assets
will be re-evaluated when applicable regulations and various
details of Bill 106 are known in the future.
We believe now is exactly the appropriate time for Management to
engage with an independent petroleum consultant and evaluator of
all of their properties to assess their current true value and
potential for the future development. We believe taking these
actions now may result in a material and significant mark up of
understated assets on Altai's balance sheet.
- We request Altai common shares become a dual-listed security on
the OSLO Axess junior
exchange. We are aware that the TSX Venture Exchange has a
Memorandum of Understanding agreement with the Oslo Axess. In
this agreement, there is it relatively easy process to become
dual-listed and also in a cost-effective manner. In fact,
several TSX Venture companies have been successfully dual-listed in
Canada and in Norway. The Oslo Axess would facilitate entry
into a much larger, separate and additionally liquid pool of
potential investors and capital markets access. A listing on
the Oslo Axess would without question provide a wider shareholder
base for Altai. Further to note, both the TXS Venture and
OSLO Axess exchanges are
recognized for their strong representation in the resource sectors
of the economy. In Norway, similar
to Canada, there is significant
demand and interest in the development of the energy sector.
Lastly, based on my institutional data I have estimated that
approximately 30% of the Altai public common share float is now
owned by investors in the Scandinavian region. A dual-listing
will clearly provide Scandinavian investors further liquidity and
also easier access for current and potential investors to continue
to invest in Altai's future.
In summary, Altai insiders and management own approximately 21%
of the total common shares outstanding. And I want to
equivocally state that at the current time this is a friendly open
letter to once again engage in discussions with the Board and
Management in an attempt to surface and create additional
shareholder value for all shareholders. I, Jonathan Mastromattei, and the Group are looking
out for the best interests of all shareholders in Altai Resources
Inc. We strongly ask the Board to take these proposals into
consideration and We look forward to working with the company in
the future.
SOURCE Jonathan Mastromattei