BullRun Investments Inc.

June 16, 2009 13:22 ET

Raytec Metals Corp (V.RAY): Dissident Shareholder Action Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 16, 2009) - Further to a May 6, 2009 news release in which Mr. Kal Malhi, President of BullRun Investments Inc. and a shareholder of Raytec Metals Inc. ("Raytec"), announced that he had requisitioned a special meeting of the shareholders of Raytec to replace its current board of directors, Mr. Malhi provides the following update.

Mr. Malhi's requisition was intended to address what he believes is the ongoing failure by management of Raytec to increase shareholder value. Mr. Malhi issued the requisition after attempting numerous times to meet with management to discuss his concerns and to discern management's plan for moving Raytec forward. Management has consistently refused to meet with Mr. Malhi to discuss his concerns.

Mr. Malhi's concerns relate to:

- Management's failure to conduct any significant work on Raytec's exploration properties, which are the basis on which Raytec has raised a significant sum of money from investors.

- Management's failure to realize any significant interest or investment return on Raytec's cash on hand, which was approximately $24 million as of October, 2008 and has since been reduced to approximately $20 million.

- Management's failure to pursue, any significant investment opportunities during a period in which other public companies with an abundance of cash on hand have capitalized on the ongoing financial crisis to acquire sound and valuable properties at significantly reduced prices.

- Management incurring administrative expenses and exploration consulting fees in excess of $2 million for the final two quarters of 2009. These fees have been incurred during a period in which Raytec has not conducted any significant exploration or achieved any milestones to advance its exploration properties

- Management announcing that it intends to issue an additional 10 million shares under a private placement. This will result in a further dilution of shareholder value when Raytec has an abundance of cash on hand and no apparent need for additional funds.

- In what Mr. Malhi believes is a response to the requisition, management seeking to reduce the number of directors from five to four at the company's upcoming AGM. Mr. Malhi believes this is intended to entrench management and shows no regard for the interests of Raytec's shareholders. Of the four directors being nominated for re-election at the AGM, Mr. Richard Knoll is the President of Sulphur Solutions Inc. and owns a minimal number of Raytec shares; Mr. Brian Thurston is the President of Raytec; and Mr. Wayne Roberts also owns a minimal number of Raytec shares.

In spite of the foregoing concerns, Mr. Malhi has decided that it would be in the best interests of the shareholders of Raytec to avoid launching a dissident action at this time as the capital markets may be in the midst of a recovery and he does not want the dissident action to negatively affect Raytec's share price or potential for strategic development at what may be an opportune time for the company. However, Mr. Malhi will continue to work with his legal counsel in regard to this matter and will requisition a shareholders' meeting should management squander the opportunity to increase shareholder value by continuing down its present path.

Contact Information

  • BullRun Investments Inc.
    Mr. Kal Malhi
    604 805 4602