Morning Star Resources Ltd.

October 28, 2013 09:37 ET

Concerned Shareholder Files Proxy Circular; Vote Your Blue Proxy to Save the $30 Million Settlement

Incumbent board's en masse resignation demonstrates it has lost support of shareholders Concerned Shareholder blasts Anthem's attempt to maintain control of Boss

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 28, 2013) - Morning Star Resources Ltd. today filed a proxy circular and letter to shareholders strongly recommending that shareholders vote their BLUE proxy FOR its four highly qualified director nominees at Boss's annual meeting of shareholders on November 14, 2013. Time is short, vote your BLUE proxy today. A vote for your BLUE proxy or vif is a vote to save the $30 million settlement.

We have a simple, straight-forward plan that puts the $30 million settlement proceeds out of risk immediately - once our independent nominees are elected, the B claims will be promptly transferred to close the settlement. This will immediately end the dispute for the benefit of Boss and all of its shareholders, the $30 million will be safe and Boss's shareholders will be able see a return on their investment. Any suggestion that our nominees will pay more than the fair value for the B claims is fear-mongering. Under our plan, the Court (not our nominees) will determine the fair value of the B claims.

Don't be fooled - the five nominees named by "Boss" are nominees of Anthem Resources, Boss's largest shareholders and de facto controller of the incumbent board for years. Anthem's five nominees have one purpose - maintain control of Boss for Anthem's benefit under the guise of a "fresh, independent" board. We strongly encourage shareholders to vote AGAINST ANTHEM'S FIVE NOMINEES.

Anthem's proposed nominees have no plan to close the settlement - Anthem's nominees have proposed two irresponsible, reckless and unsophisticated suggestions: (1) continuing under the Province's Court proceedings and possibly losing the $30 million settlement or (2) abandoning the settlement, proceeding to trial and possibly get nothing from the Province. Under both proposals, there is a real risk that the $30 million settlement proceeds will be lost, and your investment in Boss will be worthless. Only by voting your BLUE proxy can we ensure that the settlement will close and the $30 million will be safe.

The real reason the existing board is resigning en masse? - it knows that its years of mismanagement and failure to close the settlement for 2 years has finally caught up to it, and it doesn't have sufficient shareholder support to be re-elected.

Anthem's nominees' interest is not aligned with shareholders - Anthem's nominees do not own Boss common shares. Anthem's new nominees likely intend to dilute shareholders by issuing a generous amount of stock options to themselves (up to 7.8 million options, or 10% of Boss's issued and outstanding shares, may be issued under management's proposed option plan). We therefore strongly recommend that shareholders vote AGAINST THE OPTION PLAN. The interests of our nominees, who own shares, are aligned with shareholders. Our nominees will not issue any options to themselves diluting shareholders interest in Boss.

Shareholders should closely scrutinize the complete track record of Anthem's nominees in judging their qualifications - the Boss circular highlighted a few cherry-picked successes of Anthem's nominees. Don't be tricked, review the complete track record of Anthem's nominees:

Anthem Nominee Public Company Price
Decline
(%)
Period Served
(years)
T. M. MacNeil 49 North Resources Inc. 97% 7
R. E. McElroy Papuan Precious Metals Corp. 97% 2
R. E. McElroy Goldrush Resources Ltd. 70% 1
D. Randhawa Papuan Precious Metals Corp. 96% 3
D. Randhawa Sernova Corp. 68% 3
D. Randhawa Toro Resources Corp. 55% 1
D. Siemens Hansa Resources Ltd. 75% 3
R. W. Stewart Belo Sun Mining Corp. 68% 1

Mr. Beruschi, the President of Morning Star stated: "By voting your blue proxy and electing our nominees, we can together ensure that the $30 million settlement closes and secure Boss's future. Once Morning Star's independent nominees are appointed, the B claims will be promptly delivered to immediately close the $30 million settlement and allow the Court to determine their fair value."

Our four highly qualified nominees are: John Skinner, Raymond Roland, Kirk Shaw and Kristal Stewart. Our nominees were selected for their expertise and business acumen and independence from any conflicts regarding the $30 million settlement. Our nominees are well respected in the business community and are familiar with Boss's unique history. Each of our four nominees is committed to using his or her independent business judgment, gained over decades of business leadership and experience, to act in the best interests of Boss and close the $30 million settlement once and for all.

The proxy circular and our letter to shareholders, which includes detailed information about our four nominees, is being mailed to shareholders, along with a BLUE proxy or voting instruction form, and is also available via SEDAR at www.sedar.com. To keep current with further developments and for information about how to vote your shares, we have set up a website at www.bosspowerconcernedshareholder.com, which we encourage shareholder's to visit regularly.

Shareholders should vote their BLUE proxy or VIF well in advance of the voting deadline of 11 a.m. (Pacific time) on Tuesday, November 12, 2013. For assistance voting their BLUE proxy or VIF, shareholders should contact Valiant Trust Company toll-free at 1-877-699-4880 or 1-866-313-1872, or by email at inquiries@valianttrust.com.

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