Raging River Capital LP

January 19, 2016 09:22 ET

Raging River Capital LP Urges Taseko Mines Limited to Respond Promptly to Pressing Need for Change

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 19, 2016) -

  • Raging River welcomes shareholder support for its director nominees and plan for change
  • Since 2012, total fees and investment paid to Hunter Dickinson related entities totals $25.8 million
  • After a pattern of conflicts of interest, Raging River urges Board to make decisions with the best interests of the Company and all shareholders in mind
  • Highlights necessity to hold requisitioned meeting on an expedited basis so newly constituted Board can implement plans to increase shareholder value and reduce liabilities

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"), thanks those shareholders who have reached out to express support for Raging River's director nominees and urges the incumbent Board to act responsibly in the period before the requisitioned meeting (the "Meeting").

Raging River announced last week that it had requisitioned the Taseko Board of Directors to call a meeting of shareholders for the purposes of, among other things, reconstituting the board with the removal of three incumbent directors and the election of four new independent directors.

"The early indications of support we have received from shareholders who have contacted us underscores the need for change on an expedited basis. The longer the current Taseko Board goes without addressing the ongoing conflicts of interest, the more shareholder value is at risk of being destroyed. On behalf of all shareholders, we urge the Board to call and hold the requisitioned meeting promptly," said Mark Radzik, Managing Partner of Raging River. "We also remind the Board of their fiduciary duty and obligation to act in the best interests of the company and all shareholders. It is time for a Taseko Board that shareholders trust and the market has confidence in."

Raging River asks shareholders to consider the facts related to certain directors affiliated with Hunter Dickinson Inc. ("Hunter Dickinson" or "HDI"):

Hunter Dickinson affiliated directors have a disproportionate say in Taseko decisions. Hunter Dickinson is a privately owned mining group with significant influence on Taseko. Hunter Dickinson executives hold three board positions at Taseko, including the Chairman, Ronald W. Thiessen, and the CEO, Russell Hallbauer, and yet, these directors own just 2.6% of Taseko.

Hunter Dickinson related entities have received $25.8 million from Taseko. Since 2012, total fees and investment paid to Hunter Dickinson related entities totals $25.8 million. In addition, Hunter Dickinson related entities have received from Curis Resources Ltd. ("Curis") unusually high management and service fees of US$5.4 million over the 2013 and 2014 Curis fiscal years during which time Taseko invested $7 million in Curis. This means more than half of the money Taseko invested in Curis has been paid back to Hunter Dickinson related entities in fees.

Fees paid by Taseko to HDI related entities 2012 2013 2014 Total
G&A $1.9MM $2.5MM $2.7MM $7.1MM
Exploration and evaluation expenses $0.5MM $1.1MM $0.6MM $2.2MM
Total Fees $2.4MM $3.6MM $3.3MM $9.3MM
Investment by Taseko in entities with Common Directors of Taseko
Private company $7.1MM $2.4MM $9.5MM
Curis(1) $2.0MM $5.0MM $7.0MM
Total Investments $7.1MM $4.4MM $5.0MM $16.5MM
Total Fees and Investments(CAD$) $9.5MM $8.0MM $8.3MM $25.8MM
Fees paid by Curis to HDI related entities (US$)(2) $3.1MM $3.4MM $2.0MM $8.5MM
  1. Fees paid to Curis before the Taseko acquisition of Curis
  2. Fees paid by Curis before the Taseko acquisition of Curis

Given what Raging River believes to be the sustained pattern of questionable self-dealings, it is crucial that the meeting takes place as soon as possible so that trust can be restored to Taseko's Board and Raging River's nominees can begin implementing a plan to reduce liabilities, ensure the responsible use of shareholder dollars at the Board level, and improve Taseko's balance sheet to optimally position the Company to take advantage of a rebound in copper prices.

RAGING RIVER'S PLAN FOR CHANGE

Raging River believes Taseko has excellent core assets, the potential of which can be unlocked with the right leadership and the right plan for change:

  1. Align the entire Board's interests with those of Taseko shareholders, including performing a strategic review, and evaluating the relationship between Taseko and Hunter Dickinson going forward.
  2. Increase shareholder value by working together with Taseko stakeholders to evaluate opportunities to reduce liabilities, divest non-core assets and move projects forward.
  3. Focus on managing Taseko's balance sheet debt and positioning the Company to take advantage of the rebound in copper prices.
  4. Focus on the Gibraltar Mine and ability to remain solvent.
  5. Reduce overhead and stop investments in the pursuit of high-risk projects.
  6. Focus on the Prosperity Mine, utilizing core skills, as a credible development project.

RAGING RIVER'S INDEPENDENT AND EXPERIENCED BOARD NOMINEES

We believe that it is time for new independent leadership on the Board. The Requisition proposes the removal of each of Ronald Thiessen, Russell Hallbauer and Robert Dickinson as directors of Taseko, the setting of the number of directors at nine and the election the following four (4) new directors to the Board:

  • Paul Blythe - Mr. Blythe founded QuadraFNX predecessor, Quadra in 2003, and had been the CEO until the sale to KGHM in 2012 for US$3 billion. Prior to that, he was the head of Business Development at BHP Billiton copper division. He gained operations experience from his involvement in numerous mining projects including Mount Pleasant, Hemlo, Dome and Gibraltar, as well as project development experience through Lomas Bayas, Carlota and Sierra Gorda.
  • Randy Davenport - Mr. Davenport was most recently the President of CST Marcobre in Peru which sold to Minsur for $500 million. Prior to joining Marcobre, Mr. Davenport held numerous roles with Phelps Dodge/Freeport, lastly as Vice President of Resource Development. As the President of Cerro Verde, Mr. Davenport led the feasibility studies, permitting and obtaining approval for the expansion that tripled copper production. He has extensive experience in managing feasibility studies, due diligences, project evaluation, strategic development, construction and operations.
  • Henry Park - Mr. Park was most recently a partner at Vulcan Mining, a mining private equity investment platform of Soros Fund Management. Prior to that, he was the commodity analyst at Soros Fund Management where he focused on commodity investing in public and private equities and futures. Between Vulcan Mining and Soros Fund management, Mr. Park was a managing director and commodity strategist at Electrum Group.
  • Mark Radzik - Mr. Radzik is Managing Partner and co-founder of Granite Creek Partners, LLC, an investment firm that makes opportunistic debt and equity investments. Prior to that, Mr. Radzik was a Managing Director of Equity Group Investments, a Sam Zell company, where he sourced, structured, managed and invested in buyouts, growth equity and distressed situations. Mr. Radzik has served on several private and public company boards.

If elected, each of the Concerned Shareholder Nominees would serve until the next annual general meeting of shareholders or until their successors are elected or appointed.

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 Raging River has requisitioned the Meeting, there is currently no record or meeting date set for such Meeting and shareholders are not being asked at this time to execute a proxy in favour of 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, which has been filed on Taseko's SEDAR profile at www.sedar.com.

Taseko's principal business office is 15th floor - 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1. A copy of this press release may be obtained on Taseko's SEDAR profile at www.sedar.com.

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