Raging River Capital LP

March 01, 2016 07:00 ET

Raging River Capital LP Initiates Investigation Into Insider Trading at Taseko Mines Limited

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 1, 2016) -

Editors Note: There are three images associated with this press release.

- CEO and Director Russ Hallbauer and Vice President Brian Battison appear to have engaged in illegal share purchases while in possession of non-public, material information

- Despite recent attempts by Taseko to create the illusion that they are addressing Hunter Dickinson related conflicts, the fact that the conflicted directors remain and executive officers appear to have engaged in insider trading underscores the need for immediate board change

- Concerns over insider trading are the latest proof that point to the lack of oversight by the Taseko Board and raises questions about the legitimacy of all other insider dealings

Raging River Capital LP ("Raging River"), owning approximately 5.1% of the outstanding common shares of Taseko Mines Limited (TSX:TKO)(NYSE MKT:TGB) ("Taseko"), has initiated an investigation into Chief Executive Officer ("CEO") and Director Russ Hallbauer and Vice President Brian Battison for alleged insider trading. Raging River believes numerous share purchases were made while Hallbauer and Battison were in possession of non-public, material information.

Russell Hallbauer, the Company's CEO and a director, purchased 652,074 of Taseko's common shares, in multiple trades, both directly and indirectly, between January 15 and 25, 2016. Brian Battison, the Company's Vice President, purchased 31,000 of Taseko's common shares, in multiple trades, both directly and through an apparent family member, Shirley Battison, on January 19, 2016. Raging River believes that these trades occurred while both executives had knowledge of non-public, material information on the $70MM financing from Red Kite (EXP T1 Ltd.).

"In addition to the Taseko Board's repeated actions at the expense of shareholders, they are now apparently trading company shares with insider information," said Mark Radzik, Managing Partner of Raging River. "Rather than eliminating the conflicts, they are creating additional issues with potentially serious ramifications in both Canada and the United States. Shareholders cannot afford for the Taseko Board to continue to destroy shareholder value and open itself to possible catastrophic liabilities. The only way for shareholders to get a Taseko Board they can trust is to replace incumbent directors Ronald Thiessen, Russell Hallbauer and Robert Dickinson with the independent nominees put forward by Taseko's shareholders."

Raging River has initiated an investigation into the trading activity of Hallbauer and Battison with the British Columbia Securities Commission, and alerted the Toronto Stock Exchange, the New York Stock Exchange and the Securities and Exchange Commission of these very serious issues. The potential penalty for insider trading is a fine of up to $3 million and/or three years imprisonment.

Regardless of the timing of the completion of these investigations, Taseko itself needs to take action against Hallbauer and Battison. Not only is insider trading a fireable offence, but Taseko's Corporate Governance Policies and Procedures Manual gives Hallbauer as CEO the power to approve his own questionable trades:

"Prior to purchasing or selling shares of Company stock, directors must advise the CEO, CFO or counsel for the Company so as to avoid trading at a time when there may be undisclosed material information and so that Company Spokespersons will be aware of such transactions and be able to respond to questions regarding changes in share ownership from shareholders and others." (Taseko's Corporate Governance Policies and Procedures Manual, P.7)

"By Taseko's own admission they have left the fox to guard the henhouse," Radzik said. "The Taseko Board needs to take immediate action and send a message that everyone in the company will be held accountable for breaking the trust of shareholders, not to mention the law."

DETAILS OF APPARENT INSIDER TRADING

As indicated in the table below, the questionable transactions took place when Raging River believes Hallbauer and Battison knew of a material change that had not been publicly disclosed. Specifically, they were aware that Taseko was in negotiations with Red Kite (EXP T1 Ltd.) to secure a US$70 million senior secured credit facility agreement. Indeed, as two of the most senior executives of Taseko, Hallbauer (also a director) and Battison were very likely involved intimately in those negotiations.

To view Image 1, please visit the following link: http://www.marketwire.com/library/20160229-1045077_Table_800.jpg

On January 29, 2016, only four days after Hallbauer had purchased common shares of the Company, Taseko entered into the credit agreement with Red Kite. However, it wasn't until February 1, 2016, that it was disclosed publicly for the first time.

The credit agreement with Red Kite is unquestionably a material change, and the Company has confirmed it as such -- on February 8, 2016, Taseko filed a Material Change Report which indicated in no uncertain terms that the agreement is a material change. On the same day, Taseko posted the agreement on SEDAR as a "Material Document".

THE STORY OF TASEKO

While Taseko's share price has gone down, payments to Hunter Dickinson related entities have gone up. Taseko has underperformed its peers over the last five years, losing over 95% of its market capitalization as shown below. Since 2012, total fees and investment paid to Hunter Dickinson related entities totals $28.2 million. It's time to put value creation for Taseko shareholders ahead of wealth creation for Hunter Dickinson.

To view Image 2, please visit the following link: http://www.marketwire.com/library/20160229-Graph1_800.jpg

To view Image 3, please visit the following link: http://www.marketwire.com/library/20160301-Graph2_800.jpg

Taseko continues to pursue high-risk, low-probability projects, and will do so unless the board changes proposed by Raging River actually happen. Raging River believes the right value creating strategy is to optimize Gibraltar and to find a way forward with Prosperity, a project that requires and compliments the core skills of Gibraltar, but which is unable to move forward because of the complete inability of the present management and board to find a working relationship with the First Nations and the regulators.

ADVISORS

Raging River has engaged Norton Rose Fulbright Canada LLP as its legal advisor and Kingsdale Shareholder Services as its strategic and communications advisor and proxy solicitor.

ADDITIONAL INFORMATION

The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although the requisitioned general meeting of shareholders has been scheduled to take place on May 10, 2016 (the "Meeting"), shareholders are not being asked at this time to execute a proxy in favour of Raging River's director nominees (the "Concerned Shareholder Nominees") or any other resolution set forth in the requisition. In connection with the Meeting, Raging River intends to file a dissident information circular (the "Information Circular") in due course in compliance with applicable securities laws.

Notwithstanding the foregoing, Raging River is voluntarily providing the disclosure required under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations in accordance with securities laws applicable to public broadcast solicitations.

This press release and any solicitation made by Raging River in advance of the Meeting is, or will be, as applicable, made by Raging River, and not by or on behalf of the management of Taseko. All costs incurred for any solicitation will be borne by Raging River, provided that, subject to applicable law, Raging River may seek reimbursement from Taseko of Raging River's out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection with a successful reconstitution of the Board.

Raging River is not soliciting proxies in connection with the Meeting at this time, and shareholders are not being asked at this time to execute proxies in favour of the Concerned Shareholder Nominees (in respect of the Meeting) or any other resolution set forth in the requisition. Any proxies solicited by Raging River will be solicited pursuant to the Information Circular sent to shareholders of Taseko after which solicitations may be made by or on behalf of Raging River, by mail, telephone, fax, email or other electronic means, and in person by directors, officers and employees of Raging River or any proxy advisor that Raging River may retain or by the Concerned Shareholder Nominees.

Any proxies solicited by Raging River in connection with the Meeting 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 and the articles of Taseko. None of Raging River or, to its knowledge, any of its associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter proposed to be acted on at the Meeting, other than the election of directors to the Board.

Additional information concerning the Concerned Shareholder Nominees is contained in the press release of Raging River dated January 13, 2016.

Taseko's principal business office is 15th floor - 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1.

Contact Information

  • Media: Kingsdale Shareholder Services
    Ian Robertson
    Executive Vice President, Communication Strategy
    Direct: 416.867.2333; Cell: 647.621.2646
    irobertson@kingsdaleshareholder.com