VANCOUVER, Feb. 27, 2017 /CNW/ - Delbrook Capital Advisors
Inc. ("Delbrook" or the "Concerned Shareholder")
responds to the press release from Rapier Gold Inc.
("Rapier" or the "Company") dated February 25, 2017, titled "Rapier Announces Q1
Financial Highlights; Necessity for Private Placement" (the
"Rapier Press Release").
Delbrook strongly objects to the overly dilutive proposed
entrenching private placement announced by Rapier on February 20, 2017 (the "Entrenching Private
Placement"). In response to the significant working
capital deficit reported by the Company in the Rapier Press
Release, Delbrook made an offer to Rapier on February 26, 2017 to purchase 950,000 common
shares of Rapier ("Rapier Shares") at a price of
$0.16 per share (the "Superior
Financing Offer") which represents a 68.4% premium to last
Friday's closing price and a 33.3% premium to the Entrenching
Private Placement. Delbrook believes that with the support of
Rapier shareholders holding over 40% of the outstanding Rapier
Shares, it has the necessary votes to change the board and
management of Rapier. The premium offer price of the Superior
Financing Offer is justifiable in view of the pressing need to
change board and management of Rapier.
The Superior Financing Offer was rejected by Rapier this
morning. Instead, Rapier provided a counter proposal to
permit participation in the dilutive and lower priced Entrenching
Private Placement subject to the execution an 18 months support
agreement. The support agreement condition is further evidence of
the blatant attempts of management to entrench themselves rather
than seeking financing terms which would be in the best interests
of the Company. The Superior Financing Offer is the second
financing offer rejected by Rapier that are at premiums and less
dilutive than the Entrenching Private Placement.
The Superior Financing Offer would provide a sufficient capital
injection for Rapier's needs between now and Rapier's annual
general shareholder meeting scheduled for March 30, 2017 (the "AGM").
Additionally, in contrast to the Entrenching Private Placement, the
Superior Financing Offer did not require the Company to issue
dilutive warrants or to pay brokerage commissions.
WHY THE ENTRENCHING PRIVATE PLACEMENT NEEDS TO STOP
The Entrenching Private Placement does not appear to be a bona
fide business strategy but instead appears to be aimed directly at
undermining the slate of independent director nominees proposed by
Delbrook by materially diminishing the voting power of existing
shareholders to exercise their voting rights to appoint the
directors of Rapier.
Additionally, as the AGM remains scheduled for March 30, 2017, the only purpose of changing the
record of the AGM from February 17 to
February 28 would be to dilute the existing shareholder's
voting rights at the AGM and not for any legitimate business
purpose. It is clear that the timing of the Entrenching
Private Placement is an artificial and tactical response to the
overwhelming support of existing shareholders to exercise their
voting rights to effect a change of directors of Rapier.
The Entrenching Private Placement confirms our previous concern
that Rapier would take action that would undermine Delbrook's
voting rights and the voting rights of existing shareholders by
conducting a private placement of voting shares.
Additionally, as Rapier has committed unnecessary funds to engage
an expensive firm as its strategic shareholder advisor, proxy
solicitation agent and communication advisor, in addition to legal
fees in connection with the AGM, it would appear that a portion of
the proceeds of the Entrenching Private Placement are being used to
obstruct the ability for existing shareholders to vote for
directors of Rapier and instead, to entrench the existing board and
management of Rapier, rather than for legitimate business
reasons.
Delbrook currently exercises control or direction over
12,500,000 Rapier Shares, representing approximately 17.6% of the
outstanding Rapier Shares. As shareholders holding over 40%
of the outstanding Rapier Shares support the Concerned Shareholder,
there is a high likelihood of a significant change in direction at
Rapier and we do not believe it to be wise for the existing Board
of Rapier to be funding operating activities beyond March 30, 2017.
Although there may be legitimate business reasons for raising
capital in Rapier, given the concern of certain existing
shareholders of Rapier in the ability of management and the board
to effectively operate Rapier such that there is overwhelming
support to effect a change of directors of Rapier, such decisions
should be determined by a board of directors that have the support
of the existing shareholders of Rapier.
In response to Rapier's rejection of the Superior Financing
Offer and its proposal to proceed with the Entrenching Placement,
the Concerned Shareholder intends to commence legal proceedings in
the Supreme Court of British
Columbia in respect of oppressive conduct by Rapier and its
directors. If Rapier proceeds with the Entrenching Placement, the
Concerned Shareholder will seek to, at minimum, have any shares
issued as part of the Entrenching Placement cancelled or restrained
from voting at the Meeting. In addition, the Concerned Shareholder
intends to commence a derivative action regarding breach of
fiduciary duties by Rapier's directors as they are looking out for
their own interests, and not acting in the best interests of
Rapier.
ABOUT DELBROOK CAPITAL ADVISORS INC.
Delbrook Capital Advisors Inc. is an independent investment
manager which focuses on alternative strategies. Delbrook
Capital Advisors Inc. manages the Delbrook Resource Opportunities
Fund, an alternative investment fund, focused on identifying and
investing in unique growth opportunities within the metals and
mining sector
Disclaimers
Delbrook has not sought or obtained consent from any third party
to the use herein of previously published information. Any such
information should not be viewed as indicating the support of such
third party for the views expressed herein.
Except for the historical information contained herein, the
matters addressed in these materials are forward-looking statements
that involve certain risks and uncertainties. You should be aware
that actual results could differ materially from those contained in
the forward-looking statements. Delbrook does not assume any
obligation to update the forward-looking information.
Information in Support of Public Broadcast
Solicitation
Delbrook is relying on the exemption under section 9.2(4) of
National Instrument 51-102 – Continuous Disclosure
Obligations ("NI 51-102") to make this public broadcast
solicitation. The following information is provided in accordance
with corporate and securities laws applicable to public broadcast
solicitations.
This solicitation is being made by Delbrook, and not by or on
behalf of the management of Rapier.
The head and registered address of Rapier is #2270-1055 West
Georgia Street, Vancouver, BC
Canada, V6E 3P3.
Rapier has announced that it has called the AGM, to be held on
March 30, 2017. Delbrook may file a
dissident information circular (the "Dissident Circular") in
connection with the AGM, or any adjournment or postponement
thereof, in due course in compliance with applicable securities and
corporate laws.
This press release and any solicitation made by Delbrook in
advance of the AGM is, or will be, as applicable, made by Delbrook
and not by or on behalf of the management of Rapier. All costs
incurred for any solicitation will be borne by Delbrook, provided
that, subject to applicable law, Delbrook may seek reimbursement
from Rapier for Delbrook's out-of-pocket expenses, including proxy
solicitation expenses and legal fees, incurred in connection with a
successful reconstitution of the Company's board of directors.
Any proxies solicited by Delbrook may be solicited by way of
public broadcast, including through press releases, speeches or
publications and by any other manner permitted under applicable
laws, including pursuant to a Dissident Circular sent to
shareholders of Rapier. Solicitations may be made by or on behalf
of Delbrook, by mail, telephone, fax, email or other electronic
means, and in person by directors, officers and employees of
Delbrook or by the proposed nominees. Delbrook has engaged the
service of Laurel Hill as communication advisor and as proxy
advisor to assist with solicitation on behalf of Delbrook.
Pursuant to the agreement with Laurel
Hill, Laurel Hill will
receive a fee of $10,000 plus
disbursements. In addition, Laurel
Hill will be entitled to a success fee of $50,000 on the successful completion of
Delbrook's solicitation.
It is expected that any proxies solicited by Delbrook in
connection with the AGM may be revoked by instrument in writing by
the shareholder giving the proxy or by its duly authorized officer
or attorney, or in any other manner permitted by law.
Delbrook has filed this press release and the press release
dated February 14, 2017, which
contains the information required by section 9.2(4)(c) of NI 51-102
and Form 51-102F5 Information Circular in respect of the
proposed nominee directors under Rapier's company profile on SEDAR
at http://www.sedar.com.
SOURCE Delbrook Capital Advisors Inc.