International Energy & Mineral Resources Investment (Hong Kong) Company Limited

October 03, 2012 16:20 ET

Concerned Shareholders of Mosquito Correct Inaccurate Info: Independent Engineer Confirms Molybdenum Recovered Value Formula Used in Calculation of CuMo Mineral Resource Estimate is Correct

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 3, 2012) - In response to Mosquito's September 13, 2012 news release claiming an error in the calculation of the CuMo Project's mineral resource estimate and attributing the error to Shaun Dykes, the concerned shareholders (the "Concerned Shareholders") of Mosquito Consolidated Gold Mines Limited ("Mosquito" or the "Company") are pleased to advise today that they have received a memorandum from John Starkey, BASc., P.Eng. and President of Starkey & Associates Inc., an SRK associate metallurgist, confirming that the formulas used to calculate the recovered molybdenum value ("RCV"), which is included in Snowden's CuMo Project mineral resource estimate of June, 2011, were correct. Mr. Starkey concludes "The intent of the Snowden document was to determine value by assessing the amount of and price for MoO3 and this appears to have been done." As such, molybdenum values in Snowden's RCV calculation were not "artificially inflated by a factor of 1.5" as Mosquito management has incorrectly claimed in its September 13, 2012 news release.

This advice confirms that Mosquito's management acted without basis when it wrongly alleged that there was an error in the calculation of the mineral resource estimate. This incorrect disclosure has caused significant damage to both Mosquito's reputation and market capitalization. Management explicitly linked this alleged "error" to Shaun Dykes and by so doing, were trying to discredit Mr. Dykes and the Concerned Shareholders on the same day as Mosquito published its information circular for the upcoming October 16, 2012 shareholder meeting. It's another example of how Brian McClay and his management team place their personal interests ahead of shareholders' interests and another important reason why the McClay-led Board and management team must be replaced in the best interests of the Company.

The Concerned Shareholders are also puzzled in respect of the recommendations of Institutional Shareholder Services ("ISS") after they note that "the CEO's spending habits and historical business practices are not subject to good governance practices" and in light of the resignations of independent directors General Merrill McPeak, Paul Kessler and David Voyticky on July 24, 2012 due to their serious concerns of, and loss of confidence in, the Brian McClay led management team. The Concerned Shareholders question several aspects of ISS' recommendations, including the comparison of the competing proposed boards of directors. The Concerned Shareholders' nominees have extensive mining, permitting, environmental, financing and top flight technical expertise that is capable of bringing the CuMo project to the next stage and connections to provide financing for large scale projects like the CuMo project. In addition, two of the Concerned Shareholders' nominees, Shaun Dykes and Dr. John Moeller, have years of experience working on the CuMo project. In contrast, none of management's nominees have spent much time working on the CuMo project. The Concerned Shareholders also note that Scott Broughton, one of the new board nominees put forth by Mosquito management, is currently the President of Roca Mines Inc. ("Roca"), which has been halted from trading on the TSX Venture Exchange since September 7, 2012 as a result of recent Board resignations. Roca is also in serious financial trouble: as of May 31, 2012, it had a working capital deficiency of over $3 million. The Concerned Shareholders also note that Brian McClay has also encountered serious financial trouble in the past: Mr. McClay was found bankrupt in 1991, according to the records of the Office of the Superintendent of Bankruptcy Canada.

The Concerned Shareholders also discount the conclusions and recommendations set out in the Glass Lewis & Co. report, as Glass Lewis appears to have ignored the serious governance concerns raised by independent directors General McPeak, Paul Kessler and David Voyticky which led to their resignations from the Mosquito board. The excellent shareholder support that Concerned Shareholders have received to date would indicate that Mosquito shareholders disagree with Glass Lewis' and ISS' recommendations and strongly believe, as the Concerned Shareholders do, that there are serious problems with Mosquito under current management which need to be addressed. Please refer to the information circular of the Concerned Shareholders dated September 19, 2012 which the Concerned Shareholders have previously sent to shareholders, as well as to www.msqconcern.com, for details of some of the significant corporate governance and financial-related concerns that have caused them to try to effect change at Mosquito.

The Concerned Shareholders have a highly-qualified slate of board nominees, each of whom are devoted to advancing the CuMo Project and to installing proper corporate governance practices and oversight of management that are sorely lacking now. It is the intention of the Concerned Shareholders to have the Company run and managed by North Americans and to offer shareholders an optimum plan to advance the CuMo project compared to management's inferior plan. The comparisons of both plans is outlined in the letter to shareholders sent by the Concerned Shareholders yesterday. Shareholders may obtain a copy of the letter at www.msqconcern.com or on SEDAR at www.sedar.com.

It is absolutely unacceptable that management tried to discredit Shaun Dykes with accusations that have been found to be entirely incorrect at the price of causing serious harm to Mosquito and the interests of all shareholders. This is another reason why it's time to replace Brian McClay and his team. VOTE THE BLUE PROXY no later than October 11, 2012 at 2:00 pm (Pacific Time), in advance of the proxy voting deadline. Your vote is very important to the future of your investment in Mosquito no matter how many or how few shares you may own.
The Concerned Shareholders sincerely thank shareholders for their tremendous support in effecting needed change at Mosquito.

IMPORTANT INFORMATION

In some cases the procedures for voting your shares can be complicated and time consuming. In order to be deposited with Mosquito's registrar and transfer agent in time to be used at the Meeting, your BLUE PROXY must be received by the Concerned Shareholders' proxy solicitation agent, Laurel Hill Advisory Group, prior to 2 p.m. (Pacific time) on October 11, 2012.

If you require assistance with voting, please direct your questions to Laurel Hill Advisory Group at toll free 1-877-452-7184 (1-416-304-0211 collect) or by email at assistance@laurelhill.com.

Visit www.msqconcern.com for reasons to vote for change.

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