Concerned Shareholder of Clifton Star Resources Inc.

December 09, 2014 08:00 ET

Activist Shareholder Seeks to Replace Board of Clifton Star Resources Inc.

MONTREAL, QUEBEC--(Marketwired - Dec. 9, 2014) -

Harry Miller, the former President of Clifton Star Resources Inc. (the "Company"), transmitted a letter earlier this week to the board of Directors of the Company requesting that the members of the Board immediately resign from their positions. Mr. Miller, who personally holds in excess of 1.1 million shares of the Company, has indicated that a number of shareholders of the Company, representing some 30% of the outstanding shares, have urged him to assist them in finding a new slate of directors to replace the existing board. To that end, the following highly-qualified individuals have been identified and have consented or volunteered to stand as nominees.

Mr. William (Bill) Howald, the CEO of Rye Patch Gold.

Mr. Howald is a geologist. He is the President, CEO and co-founder of Rye Patch Gold Corp., a mining company operating in the state of Nevada, USA, which is mainly dedicated to the gold and silver resources development. He is also the President of Rye Patch Gold Corp.'s subsidiary, Rye Patch Gold US Inc. Since April 13, 2006, Mr. Howald acts as a director of Rye Patch Gold Corp. In addition, he is currently director at Vanity Capital Inc. and the mining consulting company Tanadog Management and Technical Services Inc. Mr. Howald acted as a consultant for several companies such as Orosur Mining Inc. and Project Evaluation and Business Development of Uruguay Mineral Exploration Inc. Moreover, he previously acted as a General Manager of Exploration of Placer Dome Inc. and served as a director at Fortune Valley Resources Inc. and Telson Resources Inc. Mr. Howald helped Rye Patch Gold Corp. to, amongst others, acquire a significant land position along the Oreana and Cortez trends in Nevada; secure a royalty revenue stream from the operating Rochester silver mine adjacent to Rye Patch Gold's Lincoln Hill project; and discover gold and silver resources along the Oreana trend that produced a robust preliminary economic assessment at the Lincoln Hill property.

Mr. Eric Owens, the CEO of Alexandria Minerals.

Mr. Owens is a geologist. He is the co-founder and CEO of Alexandria Minerals Corp. and has acted as its President since May 27, 2002. Alexandria Minerals Corp. is a Canadian gold exploration company, which more specifically concentrates in exploring and developing the Val d'Or district. Mr. Owens also served as a director at Sophia Capital Corp., which later amalgamated with Folkstone Capital Corp., and has served as CEO and director of the latter amalgamated company since 2013. In addition, he has acted as a Senior Geologist of BHP Minerals Canada Limited and Phelps Dodge Corporation. Mr. Owens served as a Vice-President, Exploration, for Intrepid Minerals Corporation and Ontex Resources Ltd. He is a professional that has more than 25 years of experience in the mineral exploration industry across North America, Mexico and Central America. He, amongst others, has accomplished the definition drilling for Californian and northern Ontario mining projects and discovered holes located in the El Zapote silver deposit in El Salvador.

Mr. Mark Billings, the CEO and Chairman of Canamex Resources Corp.

Mr. Billings is a Chartered Financial Analyst and has an MBA from the Harvard Business School. Mr. Billings is the CEO and Chairman of Canamex Resources Corp. and has been a director since February 2009. Canamex Resources Corp. is a gold exploration company with activities in Nevada and Guyana. Mr. Billings is the co-founder, Senior Vice-President, Corporate Development and director of Argex Titanium Inc. He previously acted as the Chief Financial Officer of the latter. Argex Titanium Inc. is a near-term producer of Titanium Dioxide. He acted as Chief Financial Officer for private and public Internet companies. In addition, he served as Vice-President of Corporate Finance of Desjardins Securities Inc. and as director of Orex Exploration Inc. and St-Georges Platinum & Base Metals Ltd. His accomplishments include taking companies public on the Canadian exchanges and led several public and private financings.

Mrs. Chantal Patenaude

Mrs. Patenaude is a geologist who graduated from McGill University in 1983. She later specialized in Mining Site Restoration and Rehabilitation at Université de Montréal and holds an accounting certificate from Université du Québec (2004). Over the years, she has worked for Noranda Mines in Thunder Bay, Ontario, Homestake Mineral Development Co throughout Northern Ontario and Northern Quebec as well as for Hemlo Gold Mines (latter Battle Mountain Gold) as Chief Geologist responsible for evaluating exploration properties and conducting exploration work in Northwestern Quebec. She was also involved sporadically with a number of junior mining exploration companies out of Rouyn-Noranda, Quebec. She has been involved in the Duparquet Property at various levels since 1987 and resided in Duparquet between 1992 and 2003. In 1997, she was nominated as General Director of the Quebec Prospector's Association, the first woman to attain this level of recognition in the mining industry in Quebec. While in office, she was involved in the review of the Quebec Mining Act and collaborated yearly with the Provincial and Federal Mine's Ministers. In 1999 she was nominated in the Who's Who of Canadian Women for the role she has played in the mining industry at the exploration level. Between 2003 and 2008 she was involved in the development, financing and managing of a 13 M $ Concert Hall with specific surreal venues for the Quebec City Area.

Mr. Michael Pesner, Director of Richmont Mines Inc.

Mr. Pesner is a CA and CPA. Mr. Pesner is owner of Hermitage Canada Finance inc. and acts as its President since 2002. Hermitage Canada Finance inc. is a financial advisory and investment banking services company. Mr. Pesner acts as director of several companies. Indeed, to name just a few, he serves as director of Richmont Mines Inc. since November 2010, Quest Rare Minerals Ltd. since 2007, Le Château Inc. since 2012, Liquid Nutrition Group Inc. since 2013 and Alexandria Minerals Corp. since October 2013 and as an independent director of Bitumen Capital inc. Mr. Pesner has a vast experience in financial advisory by being a KPMG Partner from 1969 to 2002. Mr. Pesner is a professional that has years of experience in investment banking, such as mergers and acquisitions and corporate governance, and financial management and advisory services.

According to Mr. Miller, "it has become abundantly clear that as a result of the actions of management and its enabling board that the Company has lost the confidence of the shareholders. Management had failed to establish and maintain a good relationship with the owners of the Duparquet Property resulting in the loss of an option to acquire 90% of its main asset. Because of that alienation they could not negotiate a deferment of the $10 million payment due the owners on December 1, 2014. Moreover, what they could not achieve by negotiations, they attempted to achieve by force with an action filed in a Quebec court. As we know, the court denied their petition. Management provided the owners with a large list of plans for the property and instead of focusing on the high grade pods which potentially could be strung together to produce a sufficient resource, along with exploring the possibility of monetizing the tailings, they chose at considerable cost, to advance the concept of a low grade bulk tonnage type of deposit requiring $1,400 gold to be economical. Notwithstanding the above, they failed to include in the Pre-Feasibility Study the results of 49 holes that contained some of the best values and widths encountered at the Beatty mine.

In addition, the board provided overly generous two year contracts with golden parachutes to management, burdening the Company with potential financial obligations. It also gave them bonuses in a company that has not produced any revenue and has little or no ability to raise capital.

Members of the new slate will immediately initiate a search for potential CEO candidates to interview. To reiterate, this responsibility that has been placed upon me by the group of shareholders to assist with the mechanism of selecting a qualified board and directing the process of ousting the present board was not taken lightly. Shareholders have turned to me to help save their investment and, after some deliberation, I responded. After all, I too am a shareholder who wishes to see a return on my large investment of some ten years. Under the current regime, I see little hope of realizing on it.

We have asked the board and management to forego all benefits and resign allowing the new board to take over at the AGM on December 17th. An easy transition would enhance the chances of striking a new deal with the owners within a reasonable time frame. Waiting some 60 days, as set out under the Company's newly adopted by-law, where, I believe, the outcome would be a foregone conclusion, would place that possibility in jeopardy. If management chooses to cling to their untenable positions, it will reveal their true interests in benefiting themselves and not the shareholders. The new slate has stated to me that they will make every effort to come to terms on a new agreement with the owners, however, if they are unable to do so because too much time has elapsed and the owners have made other arrangements, then the board will focus on other mining opportunities within Quebec. This is the new face of Clifton Star and with their able guidance, I am optimistic that its light can shine brightly once again."

Source: Harry Miller

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