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TITAN-CORE DEAL:TITAN
DISASTERCORE GOLD SHAREHOLDERS:Don’t hand over your world-class assets for ownership in a company with: • Blatant disregard for securities
and environmental laws • Disturbing ethical practices • A track record of destroying value • No mining experience in Ecuador
VOTE AGAINST
THE TITAN-CORE DEAL
TO SAVE YOUR INVESTMENT
Vote your Core Gold shares by June 7, 2019 at 5:00pm (Vancouver time).
Need help voting? Questions? Call Kingsdale Advisors at 1.866.851.4179
ATTENTION CORE GOLD SHAREHOLDERS:
A BRIGHT FUTURE LIES AHEAD AFTER WE DEFEAT THE AWFUL
TITAN DEAL
May 22, 2019
Dear fellow Shareholder,
Shareholders of Core Gold Inc. (“Core Gold” or the “Company”) are being asked to vote on
a coercive paper for paper deal with Titan Minerals Ltd. (“Titan”) which, I, Keith Piggott, one
of the largest shareholders, director, and former CEO of Core Gold, believe will be a
TITAN-IC DISASTER and destroy your investment.
Pursuant to the proposed Arrangement with Titan (the “Proposed Arrangement”), Core Gold
shareholders will exchange their Core Gold shares for Titan’s inflated paper, handing over our
world-class assets for highly diluted ownership in an Australian-based company with
questionable governance, environmental and ethical practices, a notorious track record of
depleting—NOT creating—value and no mining experience in Ecuador, the location of Core
Gold’s core assets.
In order for the Titan deal to happen, however, Core Gold needs the support of 66 2/3 of all
the votes cast on the special resolution at the meeting. Worried as they are about the
prospect of securing their vote, some members of the Core Gold board have resorted to
disgraceful tactics including calling shareholders to promise to buy back their shares after the
transaction is approved.
They have also claimed that the Company will collapse if the deal is voted down. This is false.
There are far better options for the Company, and I have an achievable plan to restore Core
Gold and create meaningful value.
Earlier this year, I had brought to the Core Gold board of directors a value-maximizing
opportunity from an international firm with exploration, mining, processing and smelting
operations, primarily focusing on the gold industry.
The firm, listed on a major international stock exchange with a market capitalization above
US $3 billion, agreed to a CDN $4,000,000 subscription for 8,888,888 common shares of Core
Gold at CDN $0.45 per share and was prepared to place an additional US$12 million at
C$0.45 in equity, US$20 million for a 20% initial earn-in into Core Gold’s Dynasty Gold project,
and invest a further US$62 million to build a 2,000 ton per day underground mine leaving Core
Gold with a 40% carried interest. Unfortunately, the Core Gold board sabotaged the deal in
favour of the Titan deal.
This international firm is still interested in investing in Core Gold, under similar terms, IF the
current board and management —namely CFO Sam Wong, and directors Gregg Sedun,
Leonard Clough, and Mark Bailey (the “Core Four”)—are no longer involved with the
Company.
In addition, in my position as a shareholder, I have been contacted by four other parties who
are interested in investing in Core Gold, in transactions that are far superior to the Titan deal,
with better terms and better value.
Together, we can stop the coercive Titan deal and choose a different path; a path to realize
the true value of Core Gold’s outstanding assets.
To do so, please vote AGAINST the Proposed Arrangement on the enclosed GOLD proxy well
in advance of the voting deadline of Friday, June 7, 2019 at 5:00 pm (Vancouver time).
Every vote counts, no matter how many shares you own.
Momentum Against the Titan-Core Deal Builds as New
Revelations of Titan’s Value-Destructing Track-Record Surface
Many long-term shareholders have reached out to me about their concerns about our
Company, and the awful Titan deal.
Like you, they invested in Core Gold because of our outstanding assets in Ecuador and the
opportunity to build significant and sustained value for all shareholders. Now, the Core Four
have put their interests ahead of minority shareholders and are tossing Core Gold’s great
potential away.
Consummating the Titan deal would be a TITAN-IC DISASTER for the shareholders of Core
Gold.
Here’s why:
• Titan, led by Executive Chairman Matthew Carr, has a track record of destroying
shareholder value.
- Titan’s share price has dramatically declined over the past year. Since May 11,
2018, Titan shares have dropped by approximately 44.12%.
- Titan is not profitable. A review of Titan’s income statements (2010-2018), show that
Titan has lost money every year, except for 2017 where Titan received a one-time
windfall for a loan forgiveness.
• Paper for paper deal with Titan’s paper is NOT a premium offer for Core Gold
shareholders.
- Titan’s shares are highly illiquid, and the company has a history of dilutive share
issuances. Since 2018, Titan has increased its issued capital by 56.8%, adding
almost 1 billion shares. If, the Proposed Agreement is approved by shareholders
and Titan does not consolidate its share capital before the Proposed
Arrangement completes, Titan’s share count will jump to a whopping
6,746,302,678 shares (that’s 6.7 Billion shares!).
• Titan’s assets pale in comparison with Core Gold’s assets.
- Titan has a 150 tpd tolling mill that has yet to receive final approvals.
- Compare that to Core Gold, which has:
o a premium Copper Duke property, permitted for drilling,
o the Linderos property with major structures and high-grade gold,
o a 2,000 tpd nameplate capacity fully permitted mill,
o a fully permitted open pit mine on the Dynasty Goldfield Project with
current resources of 2.1MM oz gold, and
o at least 13 known porphyry targets on these concessions with surface
showings similar to Sol Gold, which is further north along the same mineral
belt.
• Titan’s management has a history of misleading disclosures that should raise the ire of
securities regulators.
- In 2017, Titan issued a prospectus for an offering in Australia falsely claiming that a
well-respected mining professional—who was instrumental in the discovery of
Yanacocha an approximately 50-million ounce gold deposit—was their CEO.
- Titan has consistently misled potential investors about its assets. For example, in
fundraising documents published in 2017, May 2018, Feb. 2019, Titan described its
Torrecillas Project as an “advanced exploration” project. And now, in its most
recent financial statements and a May 2019 investor presentation, Titan says that
Torrecillas is an “early-stage exploration project.”
• Titan’s history in Peru is a tale of lies, deceit, and questionable practices.
- News reports indicate that individuals allegedly linked to Titan have been involved
in questionable activities related to an incident involving firearms at the Tulín plant
in Perú where people were wounded.
- The same news reports allege environmental violations at the Tulin plant relating
to spillage of toxic chemicals and tails. . These investigations were found to be true
and several fines were levied on Tulin Gold (Titan) by the local authorities, over a
period of several years. I have also confirmed, through notarial sworn statements
of witnesses, that Titan has tried to conceal environmental damage at the Tulin
processing plant by surreptitiously burying cyanide tailings outside the plant area.
- It is also reasonable to assume that the ASX is not aware of these problems.
• Titan has become too toxic to partner with.
- The allegations outlined above makes Titan a radioactive stock to any well-
governed fund.
- Associating Core Gold’s assets with Titan’s unacceptable environmental, safety
and occupational health record, would make us a pariah in Ecuador, a country
that prides itself in following and enforcing high ethical and environmental
standards.
- In the unlikely event that Core and Titan receive shareholder approvals for the
Proposed Arrangement, Titan, will not be able to be rid of its past sins. The
company will be mired in litigation and will be pilloried as the unacceptable face
of mining.
CORE GOLD DIRECTORS – WHAT ARE THEIR MOTIVES?
Shareholders are appropriately asking why the Core Gold board of directors are handing
over their assets to Titan, a company with such a revolting track record.
Are they ignoring Titan’s misdeeds, or do they have their heads in the sand?
Why haven’t the Core Four done any further due diligence given the latest revelations?
Clearly, the board of directors is looking after its own interests not the interests of all
shareholders as evidenced by the following:
- Insiders will continue to have jobs with Titan. Core Gold directors Mark Bailey,
Gregg Sedun, and Javier Reyes will all be directors of the new company and are
therefore incentivized to promote the deal. Luis Zapata, who is working for Core
Gold in an IR capacity, is promoting the Titan-Core deal incentivized by being
given 180,000 options by the Company. Notably, he had told several people that
he would have received a $500,000 finder’s fee on the first Titan proposal to Core
Gold in December 2018. Is Mr. Zapata receiving a finder’s fee for this deal?
This appears to be a common thread whereby directors and some employees of
Core Gold are putting their interests ahead of shareholder interests.
- Core Gold’s board and management obstructed a less dilutive and more value-
enhancing deal. I had initially voted in favour of the Titan deal, in February 2019,
strictly because of a 60-day go-shop provision and a reasonable break-fee of
$500,000 which provided the Company a legitimate opportunity to solicit superior
offers. That’s what I did: A short time later, I brought to the board of directors a less
dilutive deal with an international mining company with a market cap of over $3
billion and approximately $300 million in the bank, that would have saved the
Company. What did the Core board do? They terminated me “for cause”,
increased their Titan break fee to $3 million and terminated the go-shop period.
Does this sound like a board that puts shareholder interests first?
- Stacking the vote in favour of the Titan deal: The board of directors have fired me
as CEO and stripped me of my options because I won’t go along with the Titan
deal. They threatened me by saying that if I voted for the Titan deal I could keep
my options, and if I didn’t support their deal I would be fired for cause. I said it
sounded like a threat and refused.
Meanwhile they’ve also taken the following steps to increase their vote count in
favour of the Proposed Arrangement:
o They are allowing warrants and options, excluding mine, to be voted, even
though they have not been exercised and without requiring a separate
vote of shareholders only – which is contrary to the law.
o They are converting debt to shares for the purposes of diluting your vote.
- The Core Gold board of directors appears to want to waive Titan’s condition of
raising AUD$20 million. In the Company’s February 24, 2019 press release, it
specifies that Titan commit to a minimum AUD$20 million equity financing as a
condition of the Titan-Core deal. For an unknown reason, Core Gold has opened
the door to abandoning this requirement.
“Core may choose to waive any or all of the above conditions and complete
the arrangement if Titan has not completed the Titan Private Placement at all or
if the gross proceeds of the Titan Private Placement are less than A$20 Million.” - Core Gold’s Management Information Circular (Page 43)
Why would they do this? If this financing condition is waived, Core Gold may be
unable to pay shareholders who have exercised their dissent rights.
By focusing solely on their narrow interests and ignoring the questionable track record of Titan,
the Core Gold board of directors are destroying value for the majority of shareholders who
cannot use board privilege to benefit their own interests.
It is of great concern to me, as a shareholder of Core Gold, that the board of directors has
yet to provide its position on the many misrepresentations that Titan has made including
claims of its non-existent CEO while raising AUD$6 million or contradictory disclosures about
its Torrecillas project while raising AUD$11 million.
And this very week, days after news surfaced about Titan’s long, miserable environmental
track record in Perú, the Company’s board of directors again remain silent.
Why are they ignoring these allegations of illegal acts?
I encourage my fellow directors, and all shareholders, to carefully ponder on the implications
of proceeding with the Titan deal in light of the facts uncovered and the allegations that
have surfaced.
As they say…where there is smoke, there is fire.
THE CORRECT PATH TO RESTORE VALUE AT CORE GOLD
I have been fighting hard to return Core Gold from certain bankruptcy, by complying with
my fiduciary duty to protect ALL shareholders, rather than the insiders.
When I took over as CEO at Core Gold in September 2016 the Company was two weeks
away from being declared bankrupt and losing all its concessions. In just two years, during
my tenure, the Company’s debt owed to former employees, the tax office and the social
security office was mostly extinguished. Of the remaining debt, trade payables and loans
can be negotiated or deferred until a major value-maximizing transaction comes to fruition.
I believe we can continue to manage cash flows while we pursue a value maximizing
alternative to the Titan Deal—among the many superior alternatives available to us.
As mentioned above, I am continuing to pursue and explore strategic alternatives that will
benefit Core Gold shareholders in both the short and long-term. In my capacity as a
shareholder, I have been approached by at least five different parties interested in Core Gold
and its assets. These are credible companies considering superior proposals including
mergers, reverse mergers, loans, and gold streaming agreements.
This interest demonstrates the strength of our assets.
Immediately, following the shareholder vote on June 12, I will work with my advisory group—
consisting of international mining professionals to solidify proposals and present them to
shareholders.
We can restore value to Core Gold.
But the first step is to say NO to the Titan deal.
I encourage all shareholders to join me and vote AGAINST the Proposed Arrangement with
Titan and avoid a TITAN-IC DISASTER that will destroy the value in our Company.
VOTE YOUR SHARES TODAY
Don’t risk your investment for Titan’s inflated paper and a management team with a track
record of value destruction.
Vote against the proposed transaction on the GOLD proxy today.
Discard any proxy you receive from Core Gold. Even if you have already voted on the proxy
card sent to you by Core Gold, you can still change your vote using the enclosed GOLD
proxy. Only your latest dated proxy will count.
The deadline to vote is Friday, June 7, 2019 at 5:00 pm (Vancouver time). Don’t wait. Voting
is fast and easy.
Attached to this letter is background section which will give you more information about the
coercive Titan deal. Also attached is my dissident information circular.
If you have any questions, or need help voting, contact Kingsdale Advisors at 1-866-851-4179
or contactus@kingsdaleadvisors.com. There is a team standing by to assist you.
Sincerely,
“Keith Piggott”
KEITH PIGGOTT
BACKGROUND AND REASONS FOR SOLICITATION
Keith Piggott, one of the largest shareholders, director, and former CEO of Core Gold Inc.
(“Core Gold”) calls upon his fellow shareholders to VOTE AGAINST the Arrangement
Agreement (“Arrangement Agreement”) between Core Gold and Titan Minerals Inc. (“Titan”)
pursuant to which Titan will acquire all of the issued and outstanding Core Gold common
shares by way of a share exchange plan of Arrangement (the “Proposed Arrangement”).
If the Arrangement Agreement is approved by 66 2/3 of votes cast by security holders at the
special meeting of shareholders, warrant holders, and option holders, Core will become a
wholly-owned subsidiary of Titan and the board of directors of Titan will be comprised of six
directors, three of which will be nominees of Core Gold (Mark Bailey, Gregg Sedun, and Javier
Reyes) and three of which will be nominees of Titan (Nicholas Rowley, Matthew Carr, and
Laurance Marsland). It is also expected that, the senior management of Titan will include
Laurence Marsland as CEO and Managing Director, and Matthew Carr as an executive
director.
Mr. Piggott, and other large, long-term shareholders who have reached out to him, believe
that the Proposed Arrangement is not in the best interest of Core Gold shareholders for the
following reasons:
1. Titan and its management have a history of value destruction.
Titan’s board of directors and leadership team have been involved in massive value
destruction over the past year. From May 11, 2018 to May 22, 2019, Titan shares have
dropped by approximately 44.12%.
Since Feb. 25, 2019, the first trading day after the Core Gold-Titan announcement to May
22, 2019, Titan shares have dropped by approximately 24%, indicating that the market
isn’t excited about this deal.
2. Titan’s Executive Director Matt Carr lacks experience, has a
poor track record.
Should the Proposed Agreement be consummated, Titan’s Executive Director, Matt Carr,
will be the Executive Director of the new combined company. Mr. Carr is an interloper in
the mining sector, a fact made stark by the recent revelations about Titan’s shocking
environmental track record under his watch. Biographical details on Carr posted on
Bloomberg, provides some granularity as to his background:
Matthew Carr is an Executive Director at Andina Resources Ltd. Mr. Carr is
a successful and experienced company director. Mr. Carr founded New
Choice Homes and Urban Capital Group. Mr. Carr is a successful and
experienced company director and has been instrumental in helping New
Choice Homes build an annual turnover of $35 million pa. Since 2005, Mr.
Carr has also been director of a private hospitality group that has a number
of establishments throughout Western Australia. Mr. Carr serves as Non-
Executive Director of Perth Resources Limited.
Aside from Andina Resources Ltd., a company that did not fare very well at all, the only
other resource company listed in this biography is Perth Resources Limited which appears
to be involved, without much success, in the oil & gas sector. Mr. Carr has no board or
executive experience outside of Titan, and, at Titan, has had a negative annualized total
shareholder return.
Should he apply the “mining expertise” he gained in Perú in Ecuador, the outcome would
likely be a very predictable TITANIC DISASTER.
3. Titan’s proposed Management team is just not up to par.
Laurence Marsland, Titan-Core’s proposed Managing Director and CEO
In its Investor Presentation, Titan states that the new venture will be “led by new
Managing Director and CEO Laurence Marsland, former COO of Dundee Precious
Metals (TSX:DPM, C$820M market cap based on Dundee Precious Metals’ closing prices
on February 22, 2019).
Mr. Marsland’s track record is not quite as stellar as Titan suggests.
- Marsland worked at Gabriel Resources (2000-2001) on a project that was mired
with permitting issues and that is now in arbitration against the Romanian
government.
- In February 2002, Marsland joined Navan Mining PLC as CEO and a Director. By the
end of that year Navan was placed into administrative receivership.
- Marsland was Executive VP and COO at Dundee Precious Metals from June 14,
2004 until he was “restructured out” of his position on February 28, 2009. The chart
below speaks for itself:
- After Marsland’s departure from Dundee Precious Metals, the company sued him
in 2010 for damages for breach of contract and breach of fiduciary duty, alleging
that Marsland had misappropriated a confidential corporate opportunity:
“Dundee Precious Metals Inc. (“Dundee”), a public mining company
with its head office in Toronto, sued its former Chief Operating Officer
and Executive Vice President, the respondent Laurence Marsland, for
breach of contract and breach of fiduciary duty. Dundee alleged that
Marsland misappropriated a confidential corporate opportunity”
(Dundee Precious Metals Inc. v. Marsland, 2011 ONCA 594 (CanLII)
- It is also worth noting that Dundee’s market cap increased significantly after he
left as new management rebuilt value at the company.
What has Marsland achieved in his career? Is this the person you want as your
CEO? What does this tell you about the judgment of the proposed Titan board?
Armando Alexandri, Titan-Core’s Proposed Chief Operating Officer
In its news release dated May 21, 2019, Core Gold presents Mr. Alexandri’s biography as
follows:
“Mr. Alexandri is a Mexican mining engineer with 30 years' experience in
mining and metallurgical design.”
They have little else to say about his achievements. Is there any more to say? Why did
Titan and Core go all the way to Mexico to find a COO for their proposed operations in
Ecuador and Perú? The following facts may be of assistance:
- Mr. Alexandri is listed as the COO in Candelaria Mining, a Vancouver-based public
company that has the same office address as Core Gold. Sam Wong, Core Gold’s
CFO, is also the CFO of Candelaria Mining and Javier Reyes, a Core Gold Director,
is also a Director. It was a case of “we need a COO”, where can we find one to fit
the bill. Et voilá.
What has Mr. Alexandri achieved in his career? Is this the person you want as
your COO?
4. Titan is not profitable.
A review of Titan’s income statements (2010-2018), shows that Titan has lost money every
year, except for 2017 where Titan received a one-time windfall for a loan forgiveness.
In addition, a review of Titan’s monthly cash flows as reported in its Quarterly Financial
Reports reveals that Titan has not even made money in its core business, operating its
tolling plant. In fact, environmental damage at its tolling plant far outweigh its assets.
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
$A'000 $A'000 $A'000 $A'000 $A'000 $A'000 $A'000
1. Cash flows from operating activities
1.1 - Receipts from customers 129 - - - 2,534.79 3,284.28 1,715.11 7,663.18
1.2 Payments for: -
(a) exploration & evaluation 0 43.00- 104.00- 155.00- 98.83- 132.81- 115.82- 649.45-
(b) development 0 - - - - - - -
(c) production -87 138.00- - - 3,266.30- 4,024.64- 3,083.24- 10,599.18-
(d) staff costs -74 - 219.00- 106.00- 263.18- 408.45- 226.88- 1,297.52-
(e) administration and corporate costs -41 235.00- 322.00- 744.00- 1,096.46- 384.49- 305.29- 3,128.24-
1.3 Dividends received (see note 3) 0 - - - - -
1.4 Interest received 0 3.00 3.00 2.00 0.01 9.33 0.036 17.38
1.5 Interest and other costs of finance paid 0 - - - 1.17 0.019 - 1.19
1.6 Income taxes paid 0 - - - 45.30- 62.14- 39.77- 147.21-
1.7 Research and development refunds 0 - - - - - -
1.8 Other (DOCA payments) 0 1,383.00- - - - - 1,383.00-
Other (Costs of the Offer) 0 506.00- - - - - 506.00-
1.9 Net cash from / (used in) operating activities -73 2,302.00- 642.00- 1,003.00- 2,234.09- 1,718.90- 2,055.85- 10,028.84-
Consolidated statement of cash flows Totals
Notably, from the third Quarter of 2017 to the first Quarter of 2019, Titan:
o Lost AUD$2.98MM producing just AUD$7.66MM worth of gold and silver;
o Spent 4.75 times more money in Administration and Corporate Costs than in
Exploration (AUD$0.65MM vs AUD$3.1MM); and
o Administration and Corporate costs ballooned from Q4 2017 onwards.
Titan’s Current Liability Coverage Ratio is approx. -2.0, meaning that it is unable to pay
for its current liabilities using its cash from operating activities – this is a good indicator of
Titan’s unhealthy cash flow.
“… The Titan Minerals Ltd (ASX: TTM) share price has lost almost 92% of its value over the last 12
months. This gold and copper mineral exploration company, formerly known as Minera Gold,
is looking anything but a titan after its fall from grace.
- The Motley Fool (April 19, 2018)
5. Titan’s shares are highly illiquid.
Shareholders should be aware that under the Proposed Arrangement, Core Gold would
be delisted from the TSX-V and Core Gold shareholders would own shares in Titan, listed
on the Australian Securities Exchange (“ASX”), in Australian dollars. Losing our TSXV listing
will mean higher brokerage fees for shareholders.
As stated in a 2018 report by accounting firm Moore Stephens: “Titan’s shares do not
trade in a deep market and would be considered illiquid for valuation purposes,
meaning that the disposal of Titan shares on the ASX may not be immediately realized.”
For existing Core Gold shareholders, this means it could become very difficult and
expensive to sell your shares on the ASX.
6. Titan’s has a history of dilutive share issuances.
Since 2018, Titan has increased its issued capital by 56.8%, adding almost 1 billion
shares. If the Proposed Arrangement is approved and Titan does not consolidate its
share capital before the Proposed Arrangement completes, the share count will further
increase to 6,746,302,678 shares.
7. The Proposed Arrangement could come with significant tax
implications for Core Gold shareholders.
Canadian shareholders of Core Gold who receive Titan shares in exchange for their Core
Gold shares will realize an immediate taxable event and be liable for Canadian income
taxes if the paper value of the Titan shares exceed their cost of the Core Gold shares.
The tax liability occurs regardless of your ability to sell your Titan shares.
How Much Tax Will You Have to Pay?
If the Proposed Arrangement is accepted, Core Gold shareholders will have to pay tax
in 2019 on their gain on sale.
The stated value of the transaction is $0.45 per share. While one could argue Titan's
shares are not worth this, it will be an uphill battle to convince the Canadian Revenue
Agency, or other relevant tax authority, this is not the value given this is the board's
view on value.
So a shareholder who bought shares in the last year at $0.20 will have a taxable gain of
$0.25 per share. At the top marginal rate in Ontario, this would trigger a tax liability of
$669 for every 10,000 Core Gold shares held. By way of second example, Core Gold
shareholders who bought shares at $0.30 will have a taxable gain of $0.15 per share
resulting in a cash tax liability of $401 for every 10,000 Core Gold shares held.
Core Gold shareholders with tax liabilities from the Proposed Arrangement may need to
sell some of the Titan shares they receive to fund this liability. When this happens
shareholders will be selling shares into a highly illiquid market.
This illiquid market could be the reason Titan's shares are trading at a price to net asset
value that is inexplicably high. Core Gold shareholders who start to execute trades to
fund their tax liability will learn the hard way that the current trading price for Titan is a
mirage. The sell orders that start to hit the market could reduce the trading price of the
Titan shares to a price one might reasonably expect given Titan's asset base. This could
turn the paper premium that is being touted into a real loss of value on the Proposed
Arrangement.
8. Titan has a history of misleading disclosures.
- The ‘non-existent’ CEO
In its Prospectus dated August 18, 2017, under which Titan raised AUD$6 million to bring
the company out of receivership, the company names Dr. Miguel Cardozo as its Chief
Executive Officer (“CEO”).
This information is repeated in Titan’s Supplementary Prospectus.
Dr. Cardozo was never a CEO or an officer of Titan.
Dr. Cardozo is a distinguished member of Perú’s mining community, with many
accomplishments to his name. As Titan states in its Prospectus, Dr. Cardozo led the
team that discovered the Yanacocha gold district in 1985 and the Galeno copper-
gold porphyry deposit in 1994.
Obviously, such a distinguished individual accepting a position as CEO would bring
credibility to a junior company emerging from bankruptcy. But it simply wasn’t true.
- The changing narrative about the Torrecillas Project
In various fundraising documents, Titan has described its Torrecillas Project as an
“advanced exploration” project. Now, in its most recent financial statements and in
a May 2019 Investor Presentation, Titan says that Torrecillas is an early-stage
exploration project.
Document Purpose Description
2017 Prospectus and
Investor Presentation AUD$6 m capital raise
Distinguished CEO
“advanced
exploration project”
May 2018 Investor
Presentation AUD$11 m capital raise
“advanced
exploration project”
Feb. 2019 Investor
Presentation
Announcing the Proposed
Arrangement with Core
Gold
“advanced
exploration project”
2018 Y/E Financial
Statement and May
Investor Presentation
Financial Statements &
pitch re the Proposed
Arrangement
“early stage
exploration project”
9. Titan has a track record of empty promises and failed assets.
Titan has continuously promoted assets that have never come to fruition.
For example, on page 4 of its May 2018 Investor Presentation, Titan listed a portfolio of
seven assets. Six have either failed to materialize, have been relinquished, are inactive,
or have been inaccurately described.
The list includes the following:
ASSET: STATUS:
Mirador Processing Plant Never acquired
Mirador Concessions Never acquired
San Santiago Processing Plant On care & maintenance; gold circuit idled
San Santiago Concessions Relinquished during the Sept 2018 quarter
Tulín Processing Plant See below
Torrecillas Concessions See above
10. Titan’s valuation is suspect.
Shareholders should question any Titan valuation presented to them.
For example, immediately after the Titan’s acquisition of Andina in June 2018, Titan
disclosed the following corporate chart:
In the above chart, Titan boasts an impressive fourteen (14) entities under its umbrella.
Today, less than a year later, Titan presents a very different picture. In Core Gold’s recent
circular, a chart shows that Titan has become a lot smaller with only 3 entities under its
umbrella.
Corporate structure of the combined Core-Titan entity, May 13, 2019 (Core Circular at page “I”-4)
This “New and Improved” Titan is what the Core Gold’s board of directors is now trying
to convince its shareholders that Titan (on the right hand side of the chart above ) with
almost no assets, has the same or greater value as the Core Gold package (on the left)
with multi million ounces.
New and Improved
This is unconscionable and becomes outrageous as we proceed to outline the real value
of the assets in the “Titan package”.
The “Titan package” has two components: (1) The Vista Plant, held in the above
corporate chart under Vista Gold S.A.C., a Peruvian company; and (2) The Torrecillas
Gold Project, held in the above corporate chart under Mantle Mining S.A.C., also a
Peruvian company.
You will notice that in the original Titan-Andina structure, the following corporate
hierarchy was in place:
Titan Minerals → Andina Resources → Tulin Gold and under Tulin Gold, Titan had Vista
Gold and Mantle Mining, as wholly-owned Tulin Gold subsidiaries.
Why does this matter?
What this means is that, when the owner of the Tulin plant and the Peruvian Government
seek damages for environmental violations at the Tulin plant, they will go after Vista Gold
and Mantle Mining. These assets would likely be taken out of Titan’s hands or be mired
for many years in litigation.
Valuation of the Vista Plant
The Vista Gold Plant is Titan’s pride and joy and after the fiasco at the Tulin Plant, it is
Titan’s source of salvation. It is a tiny plant, with a capacity of 150 tons per day
(compared to Core Gold’s 2,000 ton per day plant in Ecuador).
In its July 2018 Annual General Meeting documents, Titan provides evidence of the
valuation at which it acquired Andina Resources Limited, the previous owner of the Vista
plant. In that document, it states that “Andina has invested in excess of approximately
AUD$3.5 million [C$3.23 million] and four years into the land acquisition, permitting and
building of the Vista Gold Plant.”
On June 12, 2018, RSM Corporate Australia Pty Ltd, provided an opinion as to fairness of
the Andina-Titan transaction in which it indicated the value of Andina as a whole:
Assuming we ascribe all of the value of Andina to the Vista plant, ranging between
AUD$8.313 million (C$7.67 million) and AUD$9.061 million (C$8.36 million), and if we stick
to the upper end of the range, we conclude that the value of the Vista mill would not
exceed that sum.
In conclusion, the value that can be attributed to the Vista plant asset ranges between
C$4 million and C$8.36 million.
Valuation of the Torrecillas Gold Project
Titan states that it owns the following tenements as of its most recent Quarterly Activities
Report:
The Quarterly Report further states that the above 14 tenements amount to 7,000
hectares in total.
At the time of the acquisition of Andina by Titan, the directors of Andina, commissioned
Moore Stephens Australia Pty Ltd. (“Moore Stephens”) to prepare a report as to the value
of the Torrecillas project.
In turn, Moore Stephens, hired Global Resources & Infrastructure Pty Ltd (“Global
Resources”) who on May 23, 2018, delivered its report on the Torrecillas Gold Project then
comprised 29 mining concessions, covering a total area of 15,667.68 hectares compared
to the 7,000 hectares today.
Global Resources valued Torrecillas as follows:
“we have estimated the value of the Torrecillas Gold Project, using the Comparable
Transactions (“CT”) method and in part the Joint Venture Terms method and after consideration
of several modifying factors as outlined in our report, as at the date of this report, to be in the
range $4.8 million to $6.0 million, with a preferred value of $5.4 million.”
Since Titan now only has 7,000 Hectares, or 44.68% of the original area we estimate a
value of AUD$2.413 million ($2.22 million) for the Torrecillas project as it exists today.
In its 2018 Annual Financials, however, Titan impairs the value of the Torrecillas Project:
In conclusion, the value that can be attributed to the newly-minted “early stage”
Torrecillas asset ranges between zero (fully impaired) and C$2.2 million.
Thus, if we were to add the value of Titan’s two assets—using our very liberal high-end
figures—Titan is valued at approximately $10.5 million.
Subtracting Titan’s liabilities, including its borrowings of AUD$4,958,922 (listed at Note 17
to Titan’s 2018 Annual Financials), its US$3 million loan (AUD$4.36 million) as part of the
Core-Titan deal, and account for a contingency allowance for environmental liabilities
and commercial litigation, Titan probably has no value.
11. Titan’s dirty little secret in Peru: Serious allegations regarding
Titan’s ethics and conduct.
According to news reports, Titan is alleged to have been engaged in illegal activities,
involving firearms at its Tulín plant in Perú.
According to the news reports:
“Two persons were wounded in a confrontation in a mining plant located in Tulin...
The police have arrested several people with revolvers...” (translation)
- La Lupa: News from Ica, Perú and the World - December 20, 2018
Based on Mr. Piggott’s further investigation while in Peru, the incident was allegedly in
relation to expiration of Tulin Gold’s mining assignment agreement with a private
owner, and Tulin Gold’s closure obligations, including removing tailings from the site.
Mr. Piggott has been informed that on December 14, 2018, a demonstration took place
at the plant where the crowd threw stones and broke through a perimeter fence.
Mr. Piggott also confirmed that, on Thursday December 20, 2018, a more serious incident
took place where several dozen individuals, many armed, approached the plant but
were unable to proceed further due to the presence of the security guards at their posts
inside the plant. Two assailants were wounded by gunfire and many were arrested.
12. Titan has a disturbing environmental record in Peru
Reports from Peru indicate that Titan’s Tulin Plant has been marred with environmental
violations as recently as 2018 and dating back to 2012.
In a report dated November 27, 2017, the Regional Directorate of Energy and Mines
(“DREM”) issued several penalties against the mine for a number of infractions including
for deposits of cyanide bearing tailings outside the permitted area.
The report also listed the many previous violations and fines paid, including for an incident
involving a spill of “caustic soda used in activated carbon” which reached an
archaeological zone. In connection with this incident, the DREM report stated: “It is worth
mentioning that in the path of the spill there are Nazca lines and geoglyphs and that
there are no documents in which the Ministry of Culture is informed of what happened.”
DREM also noted that Tulin Gold’s tailings pads were located beyond the permitted area
(by 40% in the case of tailings pad No. 2 and 5% for tailings pad No. 1) and that
approximately 10 thousand bricks were manufactured using the cyanide-bearing tailings
possibly mixed with cement and lime--potentially putting its workers’ health at serious risk.
Further, Mr. Piggott has learned, through notarized eyewitness accounts, that Titan has
tried to conceal their environmental damage by secretly burying cyanide-bearing
tailings outside the plant area in the dead of night. These cyanide-bearing tailings were
moved outside the Tulin plant over a period of approximately two weeks, purportedly to
allow room for further tails in the plant area.
Witnesses have attested to this and the Peruvian authorities have been notified. If the
merger occurs, such news, if correct, may materially impair Core Gold’s ability to obtain
the required permits and financing for its Dynasty Gold Project and would, if confirmed,
endanger the social license to operate.
These are matters that require investigation by Australian, Canadian and Peruvian
regulatory and/or law enforcement agencies and would also be of interest to authorities
in Ecuador. Shareholders should be extremely concerned and angered about a board
that plans to hand over our Core Gold assets to a company with such apparent deficient
conduct.
CORE GOLD’S BOARD OF DIRECTORS ARE NOT ACTING IN THE BEST
INTERESTS OF SHAREHOLDERS
Core Gold’s board of directors has failed to carry out its fiduciary duty to pursue the best
value available for its shareholders. Instead, the board is trying to expeditiously finalize the
Titan deal for its own personal benefit:
1. Core Gold and Titan have negotiated a coercive break fee.
As part of the March 10, 2019 Amending Agreement between Core Gold and Titan, the
break fee—the penalty to be paid if Core Gold backs out of the deal in certain
circumstances—was raised from $500,000 to $3 million.
A $3 million fee is excessive and is an attempt by the Core Gold directors to stop other
deals from being presented.
Core Gold shareholders deserve to have possible alternative offers made available to
them in order to make a decision on whether the Proposed Arrangement is in their best
interests.
2. Core Gold’s board and management obstructed a less
dilutive and more value-enhancing deal.
Earlier this year, Mr. Piggott had brought to Company a less dilutive deal with an
international firm that would have saved the Company.
The firm, a large-scale enterprise with exploration, mining, processing and smelting
operations, primarily focusing on the gold industry, was prepared to place US$12 million
at C$0.45 in equity. In addition, the firm, which had a market cap of$3 billion, was
interested in investing an additional US$20 million for a 20% initial earn-in into Core Gold’s
Dynasty Gold project and a further US$62 million to build a 2,000 ton per day
underground mine leaving Core Gold with a 40% carried interest.
The board’s claims that the company could go bankrupt without the Titan deal ring
hollow when one considers the merits of this proposal.
This demonstrates the board’s lack of initiative and a poor use of a competitive bidding
process to capture shareholder value. Conversely, Mr. Piggott argued at the March 9,
2019 board meeting that having two competitive bids was far better than only having a
single Titan bid.
As demonstrated by their actions, the Core Four are not interested in the interests of Core
Gold shareholders but in their own self interests.
3. Stacking the vote in favour of the Titan deal.
The Core Four is attempting to stack the vote in favour of the Proposed Arrangement.
Specifically, they:
- Have decided to make all options and warrants fully voteable, even though they
have not been exercised and without complying with the legal requirements for a
separate special resolution of the shareholders.
- Are converting friendly debt to shares which further dilutes your shares
- Fired Mr. Piggott and stripped him of all his options for stating he will vote against
the Proposed Arrangement.
This strategy, where insiders are given more votes, is often used by entrenched boards
trying to stack the vote against the interests of minority shareholders.
4. Insiders may be motivated by new jobs, positions with Titan.
If the Proposed Agreement is approved, Core Gold directors Mark Bailey, Gregg Sedun,
and Javier Reyes will be directors of the new combined Titan-Core entity.
5. Insiders are potentially earning finders’ fees and success fees
for the Titan Deal.
Luis Zapata, who is working for Core Gold in an IR capacity, is promoting the Titan-Core
deal incentivized by being given 180,000 options by the Company. Notably, he
recently had told several people that he would have a received a $500,000 finder’s fee
on the first Titan proposal to Core Gold in December 2018.
Is Mr. Zapata receiving a finder’s fee for this deal?
This appears to be a common thread whereby directors and some employees of Core
Gold are putting their interests ahead of shareholder interests.
6. Core Gold appears to be set to waive Titan’s commitment to
raise a minimum of AUD$20 million in equity financing.
In the Company’s February 24, 2019 press release, it prominently specifies the following
as a sub-headline:
“Minimum A$20 million equity financing to be completed by Titan at closing and
commitment by Titan to provide a binding term sheet at closing for US$10 million
additional financing”
In the Company’s Management Information Circular, buried on page 43, Core Gold
makes the following disclosure:
“Core may choose to waive any or all of the above conditions and complete the
arrangement if Titan has not completed the Titan Private Placement at all or if the
gross proceeds of the Titan Private Placement are less than A$20 Million.”
This suggests that Titan is having trouble raising the required capital and shareholders will
be diluted without the benefit of additional capital. Additionally, with this financing
condition waived, Core Gold may be unable to pay any shareholders who have
exercised dissent rights.
7. Core Gold’s valuation of Titan is lacking.
While there is much to criticize Titan with, we must give credit to the Titan and Andina
boards for having engaged independent third-party valuators to provide a professional,
arm’s length valuation of each other’s assets.
Sadly, this does not appear to have been the case with the Core Four directors. The
Core Circular, at page 34, helpfully informs us that:
“[i]n early November 2018, Mr. Alexandri conducted a multi-day due
diligence site visit to Titan’s properties in Peru.”
We know little about Mr. Alexandri’s remit or even whether he prepared a written report
for the Core Gold board. Clearly, he appears not to have noticed the very serious issues
Mr. Piggott unearthed during his recent visit to Perú. However, he was clearly not an
independent, third party professional valuator. Being the prospective COO, he had a
clear interest in having the transaction go forward.
Further, we are not aware of any independent legal opinion commissioned by the Core
board of directors in connection with Titan for its entities or assets in Perú. This is
inexplicable.
8. Core Gold squandered its $15 million debt facility that could
have saved the company.
In December 2017, Core Gold announced that it signed a US$15,000,000 debt facility
with Investa Bank S.A. The debt facility has now seemingly disappeared.
Had the US$15 million debt facility been completed shorty after the Company was
returned to good corporate standing in early September 2018, Core Gold could have
had the Portovelo processing plant running at 2000 tpd, had sufficient cash flow to look
after all its obligations, paid off most of its short term debts, and eventually would have
had enough money to pay down its debt facility.
A NEW PATH FORWARD TO RESTORE VALUE AT CORE GOLD
Mr. Piggott has been fighting hard to return Core Gold from certain bankruptcy, by complying
with his fiduciary duty to protect ALL shareholders, rather than just the insiders.
He is continuing to pursue and explore strategic alternatives, that are superior to the Titan
deal, and that will benefit Core Gold shareholders in both the short and long-term.
1. Short term liquidity can be managed.
Mr. Piggott is confident that short term cash flow can be managed while a better deal
for Core Gold is negotiated. In Mr. Piggott’s opinion, he saved the company before and
the present situation is eminently curable, BUT it requires a board motivated to promote
shareholders’ interests ahead of their own self interests.
2. A superior proposal.
In his capacity as a shareholder, Mr. Piggott has been approached by at least five
different parties interested in Core Gold and its assets.
These are credible companies considering superior proposals including mergers, reverse
mergers, loans, and gold streaming agreements.
These proposals include:
- Interest from the same international company which negotiated the deal in
February 2019. The company has once again expressed its interest in negotiating
a deal with Core Gold, at similar terms, following the upcoming shareholder vote.
- A reverse merger with a TSX-V company with a $10 million market cap valuing
Core Gold at $0.45 per share. This company is considering a cash raise of
CDN$24MM from their key shareholders for an approximate 33% dilution to Core
Gold.
- A merger with a cash rich company. A successful mining company with a cash
balance of approximately $40 million.
- A straight gold loan of approximately $20 million. A non-dilutive straight gold loan
for US$20 million to be paid back over a number of years.
- A gold streaming agreement on Dynasty Goldfield. An industry-leading mining
company is considering a non-dilutive gold streaming agreement on Core Gold’s
premier asset.
These proposals, several of which have an upfront cash component, do not fit the
restrictive requirements Core Gold board has imposed on alternative bids and require
approximately 90 days of due diligence.
3. A world-class advisory board.
Mr. Piggott is putting together an advisory board to help guide him in the evaluation of
potential transactions in the near future and will help to identify qualified, proven and
effective candidates for the new board of directors to replace the current board.
Advisory board members will include:
David Rae, Executive Vice President and Chief Operating Officer, Dundee Precious
Metals Inc.
David Rae holds a Bachelor of Science in Physical Metallurgy from Leeds University in
Yorkshire, England. Mr. Rae is a seasoned international mining and smelting executive
with extensive experience in Africa, Europe, and Canada and has held increasingly
senior operating and executive roles with international mining companies including
Falconbridge and Xstrata. He joined the company as Senior Vice President, Operations
in November 2012 and was appointed Executive Vice President and Chief Operating
Officer in May 2014.
Catharine Farrow, Director of Franco-Nevada and President of FarExGeoMine Ltd.
Dr. Catharine Farrow, Director of Franco-Nevada and President of FarExGeoMine Ltd. (a
private consultancy). Dr. Farrow previously served as founding Chief Executive Officer
and a Director of TMAC Resources Inc. and Chief Operating Officer of KGHM
International Ltd. (formerly FNX Mining Company Inc.). Dr. Farrow is also a member of the
Advisory Committee of the Goodman School of Mines and is an Adjunct Professor at
Laurentian University, and also has been a member of several non-profit boards and
steering committees. Dr. Farrow is a member of the Association of Professional
Geoscientists of Ontario, the Canadian Institute of Mining, Metallurgy & Petroleum, and
a Fellow of the Society of Economic Geologists. She holds a Doctorate in Earth Sciences
from Carleton University, a Master’s degree in Geology from Acadia University, and a
Bachelor of Science degree in Geology from Mount Allison University.
John Gravelle, former Global Mining Industry Leader at PWC and Director at Century
Metals Inc.
Mr. Gravelle has over 30 years of experience in accounting, tax, finance and various risk
and controls areas and their specific applications to the mining industry. Mr. Gravelle is
a Director at Century Metals Inc. and is currently the interim President and Chief
Executive Officer of Colt Resources Inc., a role he was asked to take to lead Colt through
a restructuring required due to financial difficulty. Mr. Gravelle is a retired Partner of PwC
LLP, where he was a partner from 1996 to 2015. Mr. Gravelle has held leadership positions
with PwC LLP, including serving as the firm's Global Mining Leader from 2013 to 2015, and
as Canadian Mining Leader and Americas Mining Leader from 2010 to 2015. Mr. Gravelle
was on the board of TSX listed Brio Gold from the time of its spin off from Yamana until it
was acquired in May, 2018. He served as Audit Committee chair as well as a member of
the compensation committee and special committee formed to evaluate M&A
transactions that ultimately resulted in a friendly takeover by Leagold at a 51% premium.
Mr. Gravelle has a Bachelor of Commerce degree from Laurentian University and has a
CA, CPA designation.
MR. PIGGOTT’S TRACK RECORD OF VALUE CREATION
Core Gold is attempting to discredit Mr. Piggott as a transparent tactic to distract
shareholders away from the deficiencies of the Titan deal. The facts show that Mr. Piggott has
strong track record at Core Gold, and saved the Company from certain bankruptcy.
While at Core Gold, Mr. Piggott:
- Started the open cut mine with no upfront cost;
- Paid down critical debt to tax office, social security office and 600 former workers who
were owed 7.5 months wages;
- Took the Company out of liquidation;
- Removed liens from all concessions so that Core Gold’s real assets are unencumbered
and can be used as collateral to raise money by equity or debt;
- Ensured social peace with workers, local miner groups, and government;
- Implemented environmental controls;
- Developed the Dynasty Goldfield project into a viable project;
- Increased gold production by 44% within blocks mined (versus the original drill hole
based resource model), demonstrating serious upside to the Dynasty Goldfield
resources of 2.1MM ounces in the updated 43/101 verified by independent author;
- Obtained drill ready EIA permits for Copper Duke and Linderos; and
- Implemented practices to responsibly improve surface land use after mining by
seriously reducing soil erosion in the flat waste benches beneficial to farmers.
HOW MUCH IS TITAN REALLY WORTH?
The premium that is calculated in respect of the Proposed Arrangement, including various
premium calculations in Core’s May 21, 2019 press release, create the illusion that Core’s
shareholders will enjoy a premium as a result of the Proposed Arrangement. Looking at the
numbers more carefully and considering the low trading volume for Titan’s shares, reveal
significant concerns this so-called premium is a mirage and will never be realized. Low trading
volumes also ensure Core shareholders can’t take the money and run. They will be stuck
holding Titan paper that will lose substantial value.
What are the real numbers?
Mergers, like the Proposed Arrangement, require Core’s board and management to
calculate the net asset value of both Core’s and Titan’s net assets. This net asset value (called
NAV) allows management to determine if their shareholders are getting a good deal. If
Core’s shareholders’ NAV before the merger is less than their NAV in Titan after the merger,
then the merger passes the first test for being in their best interest. If, however, Core’s
shareholders’ NAV before the merger is more than their NAV in Titan after the merger, then
the merger doesn’t pass this first test. Core Gold’s directors calculated that the current NAV
per share is approximately $0.38 before the Proposed Arrangement and $0.32 following the
Proposed Arrangement. Conversely, Core’s directors and management also calculated that
Titan shareholders will have a higher net asset value after the Proposed Arrangement. As a
result, Core Gold is giving up NAV to the current Titan shareholders by doing this transaction.
If one considers the value destruction that can result from the environmental, legal and social
license issues reported recently, the transfer of value from Core Gold’s shareholders to Titan’s
shareholders increases further. With this in mind, why would we want to do this transaction?
The only possible reason for Core shareholders to give away their NAV to Titan’s shareholders
is if Titan management had an unimpeachable track record related to brining mines to
production and had cash to finance this process. A cursory due diligence recently
undertaken by Keith Piggott indicates the opposite: they were allegedly involved in
questionable environmental practices and illegal activities in Peru. This is far short of an
unimpeachable track record.
Titan’s ability to raise money and bring the properties to production faster than other
companies that are potential M&A candidates is also required to justify our transfer of NAV
from Core to Titan. The Core board that is asking you to approve the Proposed Arrangement
has shown that it has its doubts regarding Titan’s fund-raising abilities. They showed this doubt
when they tried to sneak into the deal at the 11th hour a provision that allows them to waive
the requirement that Titan be able to raise money before completing the merger. The value
of the Proposed Arrangement to Core shareholders isn’t there even if Titan can raise the
money; it’s insane if they can’t raise the money.
The share premium mirage.
Core’s directors have not disclosed that net asset value attributable to Core’s shareholders
will decrease as a result of the merger. They prefer instead to tout the premium based on
relative trading values of the two companies. In fact, in their May 21, 2019, they disclose six
different share premium calculations for various scenarios but still don’t show the NAV per
share calculation.
The share premium calculation is relevant only if the shares trade in a highly liquid market
which is not the case. when trading volumes are low since the trading price during periods of
low trading volume may not reflect what might be realized if there were normal trading
volumes. Core’s trading volumes are significantly higher than Titan’s trading volumes. Since
Titan’s trading volumes are so low, Core shareholders should be concerned the premium is a
mirage they will never realize. More specifically, Core’s shareholders should be concerned
that if normal trading volumes return, a necessity if shares are to be disposed, Titan’s share
value will decrease substantially. One reality check for the reasonableness of the trading
price where there are low volumes is to compare the trading price to the company’s
underlying net asset value discussed above. Specifically, is Titan’s trading price compared to
its NAV reasonable in the circumstances? If it isn’t, then this might point to an unsustainably
high market price that is a significant concern to Core shareholders.
With respect to the price compared to net asset value - or Price / NAV - one would expect
an exploration or early development stage company such as Titan to have a trading price
that is significantly below its NAV. The current state for gold companies is that small gold
producers such as Core generally trade at a discount to NAV - meaning the value based on
current market capitalization is less than NAV. Core’s directors agree with this since Core’s
current share price is a discount to Core’s NAV per share of $0.38 calculated by Core’s
board. Senior gold producers, generally speaking, trade at a premium to NAV while
intermediate producers are mixed with some trading above and some being below NAV.
Exploration and early development stage companies often trade at a price that is an even
bigger discount to NAV than the discount that applies to junior producers.
It’s instructive to look at the Price / NAV of Australian intermediate and senior gold producers.
Newcrest is a senior producer and trades at a price that is 25% above NAV. The simple
average of the Price / NAV for Endeavor, Evolution and Oceana indicate they trade at
around a 5% premium to NAV. So the highest quality intermediate diversified gold producers
in Australia have a market capitalization or $105 for each $100 of net asset value.
Now let’s look at the shares of Titan. Our initial expectation is that its trading price would be
a significant discount to its NAV. This is typical for early development stage or exploration
companies unless there is something incredibly special about their assets. In Titan’s case,
there is nothing special. To my surprise, when we look at Titan, its shares trade at 262% of their
NAV. This should cause us to pause. Why on earth would an early development or exploration
stage company have a trading price more than 2 1/2 times its NAV? Why is Titan’s market
price to NAV significantly more favourable than highly regarded Australian diversified gold
producers such as Newcrest, Endeavor, Evolution and Oceana There are two possible
answers:
1) First possible answer is Titan’s share price is high since low trading volumes result in a
distorted and unsustainably high share price. In this case, Core’s shareholders will be
in for a nasty downward price surprise and will not be able to sell at any of the six share
price premiums touted in Core’s May 21, 2019 press release. Low trading volumes
mean Core shareholders will not be able to cash in on the touted premium. Core
shareholders may find themselves with Titan shares that have settled to a price level
closer to where one would expect so the Core shareholders end up holding shares
with lower trading price than the Core shares they gave up and poor trading volumes
that make these shares difficult to sell.
Core shareholders can’t take the money and run. If the Titan shares had a trading
price closer to what one would expect if trading volumes were normal, the shares
might trade at a Price / NAV of 0.5 rather than the unexplainable 2.62. In this case
Titan’s share price would be $0.004 which is a mere 20% of their $0.02 current trading
price.
2) Second possible answer is Titan’s team are the rock stars of the mining industry.
This is the only other possible reason their shares trade at such a high premium to their
NAV. Titan’s legal and environmental issues, its track record of over promising and
underdelivering indicated in this circular clearly demonstrate there is nothing special
about Titan so this is not the reason for the outrageously high Price / NAV.
Looking at the real economics rather than the deal premium mirage that is being
touted, makes us wonder why anyone at Core would want to do this deal.
If you experience any problems or require assistance voting your GOLD form of
proxy or GOLD VIF, contact Kingsdale Advisors, at 1-866-851-4179 toll-free in North
America, or at 1-416-867-2272 outside of North America, or by email at
contactus@kingsdaleadvisors.com and they will be able to assist you to ensure your
vote is counted at the Meeting.
Frequently Asked Questions
Q: Why did I receive this package of information?
A: Shareholders of Core Gold Inc. are being asked to vote on an all-stock deal with Titan
Minerals Ltd. Keith Piggott, one of the largest shareholders, director, and former CEO of Core
Gold—believes that the Proposed Arrangement is not in the best interests of shareholders and
therefore is asking shareholders to join him, and other large, long-term shareholders, to stop
the deal.
Q: When and where is the Meeting?
A: The Special Meeting of the shareholders, warrantholders and optionholders of Core Gold
Inc. will be held on Wednesday, June 12, 2019 at 10:00 AM (Vancouver time) at The Terminal
City Club at 837 West Hastings Street, Vancouver, BC, V6C 1B6, Canada.
Q: What am I voting on?
A: As a Shareholder, you are being asked to vote ONLY your GOLD form of proxy or voting
instruction form AGAINST the Titan deal. If you are an option or warrant holder, you are being
asked to vote AGAINST the Titan deal on the green or yellow form of proxy provided to you
by Core Gold.
Q: Who is entitled to vote at the Meeting?
A: If you were a shareholder as of the close of business on the Record Date, being May 6,
2019, you are entitled to vote at the Meeting.
Q: Why should I support the Concerned Shareholder and vote AGAINST the Titan deal?
A: The Titan deal is not in the best of interests of Core Gold shareholders for the following
reasons:
- Titan and its management team have a track record of destroying—not
creating shareholder value
- Titan is not profitable
- Titan’s shares are highly illiquid
- Titan has a history of dilutive share issuances
- The Proposed Agreement could come with significant tax implications for Core
Gold shareholders
- Titan has a history of misleading disclosures and questions ethics and
governance practices
Q: How do I vote?
A: If you are a Registered Shareholder, you may vote in person, by email, by fax, or by mail or
delivery as follows:
To vote by email: Complete, sign and date your GOLD form of proxy. Scan both sides of
the proxy and return it by email to: contactus@kingsdaleadvisors.com.
To vote by fax: Properly complete, sign and date your GOLD form of proxy and return it by
facsimile to Kingsdale Advisors at 1-866-545-5580 toll-free or 1-416-867-2271.
To vote by mail or delivery: Properly complete, sign and date the GOLD form of proxy and
return it in the postage prepaid envelope provided to Kingsdale Advisors, The Exchange
Tower, 130 King Street West, Suite 2950, Toronto, Ontario M5X 1E2.
To vote in person: You do not need to complete and return the enclosed GOLD form of
proxy. All you need to do is to come to the Meeting with your GOLD form of proxy. Before
the official start of the Meeting on June 12, 2019, register with the representative(s) from
Computershare Investor Services Inc. (“Computershare”) who will be located at a
welcome table just outside the meeting room.
If you are a Non-registered (beneficial) Shareholder, you may vote in person, by Internet, by
fax, by telephone or by mail or deliver as follows:
To vote by Internet: Go to www.proxyvote.com and enter your 16-digit control number
located on the enclosed GOLD voting instruction form. If you are a U.S. resident, follow the
instructions provided with your GOLD voting instruction form or other proxy document.
To vote by fax: Properly complete, sign and date your GOLD voting instruction form and
return it by fax to 905-507-7793 or 514-281-8911. If you are a U.S. resident, follow the
instructions provided with your GOLD voting instruction form or other proxy document.
To vote by telephone: If you are a Canadian Non-registered Shareholder, call 1-800-474-
7493 (English) or 1-800-474-7501 (French). You will require a 16-digit Control Number
(located on the front of your GOLD voting information form) to identify yourself to the
system. If you are a U.S. Non-registered Shareholder, follow the instructions provided with
your GOLD voting instruction form or other proxy document.
To vote by mail or delivery: Complete, sign and date your GOLD voting instruction form
and return it in the postage prepaid envelope provided to the address set out on the
envelope.
To vote in person: Insert your name in the space provided on the enclosed GOLD voting
instruction form or submit any other document in writing to your nominee (i.e. broker,
advisor, trust company) that request that you should be appointed as proxy. Then, follow
the instructions on the GOLD voting instruction form and sign and return the GOLD voting
instruction form in accordance with the instructions provided. Before the official start of
the Meeting on June 12, 2019, register with the representative(s) from Computershare who
will be located at a welcome table just outside the meeting room.
If you are a Holder of Warrants (green form of proxy) or Options (yellow form of proxy), you
should specify your choice by marking the box on the green and/or yellow form of proxy and
by dating, signing and returning your proxy(ies) by (i) mail addressed to Computershare
Investor Services Inc., Proxy Department, 135 West Beaver Creek, P.O. Box 300, Richmond Hill,
Ontario, L4B 4R5; (ii) hand delivery to Computershare Investor Services Inc., Proxy
Department, 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1; or (iii) fax to 1-866-
249-7775 (toll free), 1-416-263-9524 (international).
Q: What proxy or voting instruction form should I use?
A: If you are a shareholder, use only the GOLD form of proxy or voting instruction form to vote
AGAINST the Titan deal.
If you are a holder of options, use the yellow form of proxy, and if you are a holder warrants,
use the green form of proxy, each provided by Core Gold to vote AGAINST the Titan deal.
Q: What if I a shareholder and have already voted a management proxy or voting
instruction form?
A: Even if you have already voted using a management proxy or voting instruction form, you
have every right to change your vote. A later-dated GOLD form of proxy or voting instruction
form automatically revokes any and all previously submitted forms of proxy or voting
instruction forms.
Q: If I deposit a GOLD proxy or voting instruction form, how will my shares be voted?
A: You can specify how you want to vote your shares on the GOLD form of proxy or voting
instruction form. If you do not specify a choice, your GOLD form of proxy or voting instruction
form will be voted in accordance with the Concerned Shareholder’s voting
recommendations, AGAINST the Titan deal.
Q: When must my shares be voted by?
A: Your shares must be voted prior to 5:00 PM (Vancouver time) on Friday, June 7, 2019. If you
are mailing a signed GOLD form of proxy or voting instruction form, please ensure that it
arrived before this time.
1
PROXY CIRCULAR
Keith Piggott
TABLE OF CONTENTS
GENERAL INFORMATION ........................................................................................................... 2
NOTICE TO UNITED STATES SHAREHOLDERS ............................................................................... 3
FORWARD-LOOKING STATEMENTS ............................................................................................ 3
PARTICULARS OF MATTERS TO BE ACTED UPON AT THE MEETING .............................................. 4
Proposed Plan of Arrangement with Titan Minerals Ltd. ....................................................... 4
Other Business ....................................................................................................................... 5
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS ............................................................... 6
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON .............................................. 7
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS ............................................... 7
GENERAL PROXY INFORMATION ............................................................................................... 7
Solicitation of Proxies ............................................................................................................ 7
Appointment of Proxies ........................................................................................................ 8
Registered Shareholders ....................................................................................................... 9
Holders of Warrants and Options .......................................................................................... 9
Revocation of Proxies ......................................................................................................... 10
Exercise of Discretion .......................................................................................................... 10
Non-Registered Shareholders ............................................................................................. 11
Delivery of Proxy-Related Materials to Objecting Beneficial Holders ................................. 12
AUDITOR ................................................................................................................................. 12
ADDITIONAL INFORMATION .................................................................................................... 12
INFORMATION CONTAINED IN THIS CIRCULAR ........................................................................ 13
APPROVAL .............................................................................................................................. 13
2
GENERAL INFORMATION
This information circular (this “Circular”), dated May 22, 2019, and the accompanying GOLD form
of proxy or GOLD voting instructions form (“VIF”), are provided to you in connection with the
solicitation of proxies by and on behalf of Keith Piggott (the “Concerned Shareholder”) to be used
at the special meeting of securityholders of Core Gold Inc. (the “Company”), scheduled to be
held on Wednesday, June 12, 2019 at 10:00 am (Vancouver time) at The Terminal City Club
located at 837 West Hastings Street, Vancouver, British Columbia, Canada V6C 1B6, and at any
and all adjournments or postponements thereof (the “Meeting”) to consider a proposed plan of
arrangement between the Company and Titan Mineral Ltd. (the “Proposed Arrangement”). Only
shareholders of record at the close of business on May 6, 2019 (the “Record Date”) are entitled to
receive notice of and vote at the Meeting. Each common share (each, a “Share”) of the
Company is entitled to one vote at the Meeting. In addition, the Company proposes to have
holders of warrants to purchase Shares and the holders of options to purchase Shares vote at the
Meeting. The Company intends to allow the holders of each warrant and each option to one
vote for each warrant and one vote for each option on the special resolution to be voted on at
the Meeting.
This solicitation of proxies is made by the Concerned Shareholder. This solicitation of proxies is NOT
made by or on behalf of management of the Company.
You were sent a management information circular dated May 10, 2019 (the “Management
Circular”) and a management form of proxy (the “Management Proxy”) from management of
the Company soliciting proxies in connection with the Meeting. According to the Management
Circular, management of the Company is proposing that securityholders of Core approve the
Proposed Arrangement.
If you support the Concerned Shareholder, only use the GOLD form of proxy or GOLD VIF
accompanying this Circular. If you previously returned a Management Proxy, you have the right
to change your vote. To do so, simply sign, date and return the GOLD form of proxy or GOLD VIF.
A later dated GOLD form of proxy or GOLD VIF supersedes a previously completed Management
Proxy.
The Concerned Shareholder is soliciting proxies in support of votes AGAINST the Proposed
Arrangement.
RECOMMENDATION TO SECURTYHOLDERS
The Concerned Shareholder recommends that you vote “AGAINST” the Proposed Arrangement.
The individuals named in the GOLD form of proxy or GOLD VIF intend to cast the votes
represented thereby “AGAINST” the Proposed Arrangement, unless you direct that the Shares
represented thereby be voted otherwise. If you are a warrant or option holder of the Company,
the Concerned Shareholder recommends that you use the green (warrants) and yellow (options)
proxies provided in conjunction with the Management Circular to vote “AGAINST” the Proposed
Arrangement.
3
Your vote is extremely important to the future of your investment and the Company. If, after
reading this Circular, you agree that the Proposed Arrangement is not in the best interests of the
Company and your investment, please sign, date and deposit the GOLD form of proxy or GOLD
VIF. If you are a warrant or option holder of the Company, please vote AGAINST the Proposed
Arrangement and sign and date the green (warrants) and yellow (options) proxies, as applicable,
provided in conjunction with the Management Circular. Please follow the instructions under the
heading “General Proxy Information” in this Circular with respect to depositing a proxy.
NOTICE TO UNITED STATES SHAREHOLDERS
This solicitation is not subject to the requirements of Section 14(a) of the United States Securities
Exchange Act of 1934, as amended (the “U.S. Exchange Act”). Accordingly, this solicitation is
made in the United States with respect to securities of Core Gold in accordance with Canadian
corporate and securities laws and this Circular has been prepared in accordance with disclosure
requirements applicable in Canada. Shareholders in the United States should be aware that these
Canadian requirements are different from the requirements applicable to proxy statements under
the U.S. Exchange Act.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Circular constitute “forward-looking information” as such term
is defined in applicable Canadian securities legislation. Statements relating to the intentions of the
Concerned Shareholder the impact of the Proposed Arrangement, if completed, on the financial
condition, operations, business and strategies of the Company, future management and other
matters related to the Company, are all forward-looking information. All statements other than
statements of historical fact may be forward-looking information. Such statements reflect the
Concerned Shareholder's current views and intentions with respect to future events and are
subject to certain risks, uncertainties and assumptions. Material factors or assumptions that were
applied in providing forward-looking information, include, but are not limited to, the actual
financial health of the Company, the support expressed by shareholders to the Concerned
Shareholder, the anticipated effects of the Proposed Arrangement and the current general
regulatory environment and economic conditions. Many factors could cause the actual results,
performance or achievements that may be expressed or implied by such forward-looking
information to vary from those described herein should one or more of these risks or uncertainties
materialize. Should any factor affect the Company (before or after the Proposed Arrangement
and whether or not it completes) in an unexpected manner, or should assumptions underlying the
forward-looking information prove incorrect, the actual results or events may differ materially from
the results or events anticipated. Any such forward-looking information is expressly qualified in its
entirety by this cautionary statement. Moreover, the Concerned Shareholder does not assume
responsibility for the accuracy or completeness of such forward-looking information. The forward-
looking information included in this Circular is made as of the date of this Circular and the
Concerned Shareholder undertakes no obligation to publicly update or revise any forward-
looking information, other than as required by applicable law.
4
PARTICULARS OF MATTERS TO BE ACTED UPON AT THE MEETING
Proposed Plan of Arrangement with Titan Minerals Ltd.
The Arrangement
At the Meeting, among other things, you will be asked to consider and, if thought fit, pass a special
resolution approving the Proposed Arrangement under the provisions of Division 5 of Part 9 of the
Business Corporations Act (British Columbia) (the “BCBCA”) between the Company and Titan
Minerals Limited (“Titan”).
The Company and Titan entered into an arrangement agreement dated February 23,
2019, which was subsequently amended by an amending agreement dated March 10, 2019 and
a second amending agreement dated May 8, 2019 (as amended, the “Arrangement
Agreement”). Under the terms of the Arrangement Agreement and the Proposed Arrangement,
among other things, shareholders of the Company (the “Company Shareholders”) will receive
20.0 ordinary shares of Titan (each whole share a “Titan Share”) for each Share of the Company
held (the “Exchange Ratio”). Holders of options and warrants exercisable into the Company
Shares will receive replacement options and warrants exercisable into Titan Shares on
comparable terms as their current options and warrants, taking into account the Exchange Ratio,
subject to compliance with the listing rules of the Australian Securities Exchange (the “ASX”). The
Exchange Ratio is subject to adjustment in the event of a split or consolidation of the issued and
outstanding Titan Shares prior to the effective time of the Arrangement. According to the
Management Circular, Titan intends to, subject to the approval of the Titan shareholders,
undertake a consolidation of the Titan Shares on the basis of one Titan Share for every 10 existing
Titan Shares. If such share consolidation is approved and becomes effective prior to the effective
time of the Proposed Arrangement, it is proposed that the Exchange Ratio will be adjusted such
that, upon the Proposed Arrangement becoming effective, the Company Shareholders will
receive 2.0 consolidated Titan Shares in exchange for each the Company Share held.
Upon closing of the Arrangement, the Company will become a wholly-owned subsidiary of Titan.
Under the terms of the Arrangement Agreement, upon completion of the Arrangement, the board
of directors of Titan will be comprised of six directors, three of which will be nominees of the
Company (Mark Bailey, Gregg Sedun and Javier Reyes have been proposed) and three of which
will be nominees of Titan (Nicholas Rowley, Matthew Carr and Laurence Marsland have been
proposed). The Chair of the Board of Directors of Titan will be selected from among the three
Company nominees. Under Titan's current constating documents, the Chair will be entitled to a
casting vote. The Management Circular indicates that it is expected that, on completion of the
Proposed Arrangement, the senior management of Titan will include Laurence Marsland as CEO
and Managing Director, Matthew Carr as an Executive Director, Armando Alexandri as Chief
Operating Officer and Travis Schwertfeger as Chief Geologist. The Management Circular
indicates that the combined entity will be based in Perth, Australia and the operational teams for
each of the combined entity's projects will remain in place on completion of the Arrangement.
5
In connection with the Proposed Arrangement and a condition to it, Titan has agreed to
undertake a private placement to raise a minimum of A$20 million at an issue price to be agreed
by Titan and the Company (each acting reasonably and taking into account the then current
market conditions) (the “Titan Private Placement”). The issuance of new Titan Shares under the
Titan Private Placement is subject to Titan shareholder approval.
Approval Requirement
In order to become effective, it is proposed that the Proposed Arrangement be approved by a
resolution (the “Company Arrangement Resolution”) passed by (i) not less than two-thirds of the
votes cast by the Company Shareholders, the holders of warrants to purchase the Company
Shares and the holders of options to purchase the Company Shares (the “Company
Securityholders”) present in person or represented by proxy at the Meeting voting together as a
single class; and (ii) as required by the TSXV, at least a simple majority of the votes cast by the
Company Shareholders present in person or represented by proxy at the Meeting, excluding votes
attaching to the Company Shares beneficially owned by Titan and “associates” and “affiliates”
of Titan (as such terms are defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance
Manual).
The Concerned Shareholder believes that lumping the options and warrants into the special
resolution is an impermissible defensive tactic and contrary to Section 289 of the BCBCA. The
Concerned Shareholder does not oppose allowing holders of options and warrants to vote in an
additional resolution, but the shareholders must be given the opportunity to vote alone on their
special resolution. The Concerned Shareholder intends to oppose this defensive tactic when Core
Gold makes its final court application for approval of the Proposed Arrangement.
Other Conditions
Completion of the Proposed Arrangement is also subject to the satisfaction or waiver of certain
conditions including that Titan shall have received subscription commitments for the Titan Private
Placement five business days prior to the Meeting and that, prior to completion of the
Arrangement, Titan will have entered into a credit committee approved term sheet or subscription
commitments with a view to undertaking an additional financing to raise gross proceeds of US$10
million (the “Additional Titan Financing”). Completion of the Proposed Arrangement is also
conditional upon the Titan shareholders passing an ordinary resolution approving the issuance of
the Titan Shares under the Arrangement, the Titan Private Placement and, if applicable, the
Additional Titan Financing.
In addition, completion of the Arrangement is also subject to other conditions including the
approval of the TSXV and the British Columbia Supreme Court (the “Court”) and other customary
closing conditions, all of which are described in more detail in the Management Circular.
Full Details
Full details of the Proposed Arrangement, including the background to the transaction, dissent
rights, etc. can be found in the Management Circular on SEDAR at www.sedar.com.
6
Recommendation
The Concerned Shareholder has expressed significant concerns with the Proposed Arrangement
as detailed above and in previous press releases.
RECOMMENDATION TO SECURITYHOLDERS
The Concerned Shareholder recommends that you vote “AGAINST” the approval of the
Proposed Arrangement.
Other Business
As at the date hereof, the Concerned Shareholder knows of no amendments, variations or other
matters to be presented for action at the Meeting. If, however, any amendments, variations or
other matters properly come before the Meeting, the persons named as proxyholder in the GOLD
form of proxy or VIF will vote on such matters in accordance with his or her best judgment on the
matter.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
For purposes of the Meeting, the Company established May 6, 2019 as the Record Date for
determining shareholders entitled to notice of the Meeting and to vote at the Meeting.
To the knowledge of the Concerned Shareholder, based on publicly available information as at
the close of business on the Record Date, there were 164,316,194 Shares issued and outstanding,
with each Share entitled to one vote on all matters to come before the Meeting. In addition, as
at the close of business on the Record Date, there were 27,060,160 warrants to purchase Shares
and 9,148,000 options to purchase Shares issued and outstanding, each warrant and each option
exercisable for one Share. The Company intends to allow the holders of each warrant and each
option to one vote for each warrant and one vote for each option on the special resolution to be
voted on at the Meeting. See the Management Circular for further information on the outstanding
securities of the Company.
To the knowledge of the Concerned Shareholder, based on publicly available information in the
Management Circular, as at May 10, 2019 (the date of the Management Circular), no person
beneficially owns, directly or indirectly, or exercises control or direction over, Shares of the
Company carrying 10% or more of the outstanding Shares other than as set out below:
Name of Shareholder Number of Shares
Owned
Percentage
of Outstanding Shares
Credipresto S.A. De C.V.
Sofom E.N.R.
16,432,110 10.0%
7
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The Concerned Shareholder is a director of the Company and was recently terminated as Chief
Executive Officer of the Company in retribution for opposing the Proposed Arrangement. The
Concerned Shareholder will no longer remain on the board of directors upon completion of the
Proposed Arrangement. The Concerned Shareholder is a shareholder and warrant holder of the
Company. As at the date of this Circular, the Concerned Shareholder owns 11,201,465 Shares
and 1,447,083 warrants of the Company.
Except as disclosed herein, neither the Concerned Shareholder nor the Concerned Shareholder's
associates or affiliates are aware of any material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in the Proposed Arrangement to be voted upon at the
Meeting.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Except as disclosed herein, information concerning any material interests, direct or indirect, of any
director or executive officer of the Company, any other “informed person” (as such term is defined
in National Instrument 51-102 – Continuous Disclosure Obligations) or any associate or affiliate of
any of the foregoing, in any transaction since the beginning of the Company’s most recently
completed financial year or in any proposed transaction which has materially affected or will
materially affect the Company or any of its subsidiaries, or the Proposed Arrangement to be voted
upon at the Meeting, can be found in the Management Circular on SEDAR at www.sedar.com.
GENERAL PROXY INFORMATION
Solicitation of Proxies
This Circular is furnished by the Concerned Shareholder in connection with the solicitation of
proxies for use at the Meeting and at any adjournment or postponement thereof. Proxies may be
solicited by mail, telephone, fax or other electronic means and in person, as well as by newspaper
or other media advertising.
The Concerned Shareholder has retained Kingsdale Advisors (“Kingsdale”) as his strategic
shareholder and proxy advisor. Kingsdale’s responsibilities will principally include soliciting
shareholders, providing strategic advice and advising the Concerned Shareholder with respect
to the Meeting and proxy protocol. Any proxies solicited by or on behalf of the Concerned
Shareholder, including by Kingsdale, may be solicited by way of public broadcast, including
through press releases, speeches or publications and by any other manner permitted under
applicable laws. All costs incurred for any solicitation will be borne by the Concerned Shareholder.
8
The anticipated cost of the Concerned Shareholder’s solicitation is estimated to be $50,000.00,
plus disbursements and customary fees.
Kingsdale can be contacted toll-free at 1.866.851.4179 or 416.867.2272 or by email at
contactus@kingsdaleadvisors.com.
No person is authorized to give information or to make any representations other than those
contained in this Circular and, if given or made, such information or representations must not be
relied upon as having been authorized by the Concerned Shareholder to be given or made.
Advisors
The Concerned Shareholder has retained Koffman Kalef LLP and Farris, Vaughan, Wills & Murphy
LLP as his legal advisors and Kingsdale Advisors as his strategic shareholder, communications and
proxy advisor.
About the Concerned Shareholder
Keith Piggott is a seasoned mining developer and operator with over 50 years of experience in
Africa, Australia, Mexico and South America. Mr. Piggott as CEO, and as an investor, rescued
Dynasty Metals and Mining from certain bankruptcy and the loss of all its assets in 2016. He has
worked diligently for over two years to take the Company from a $5 million market capitalization
to over $40 million market capitalization before the Proposed Arrangement. He can be contacted
at kpiggott100@gmail.com, or by phone at 520-247-5753.
Appointment of Proxies
The persons named as proxyholders in the enclosed GOLD form of proxy are Keith Piggott and,
failing him, Bernard Poznanski, and, failing him, Thomas Wachowski. A shareholder of the Company
has the right to appoint a person, who need not be a shareholder of the Company, other than the
persons named in the GOLD form of proxy accompanying this Circular, as proxyholder to attend
and act for and on behalf of such shareholder at the Meeting and may exercise such right by
striking out the names of the persons named in the GOLD form of proxy and inserting the name of
the person to be appointed as proxyholder in the blank space provided on the GOLD form of
proxy or by completing another proper form of proxy.
Shareholders should carefully complete and sign their proxies in accordance with the instructions
contained in this Circular and on the GOLD proxy in order to ensure that their proxies can be used
at the Meeting. Completed and executed proxies should be returned in accordance with the
instructions on the GOLD form of proxy. Proxies received by Kingsdale in accordance with the
foregoing will be delivered to the Company or its transfer agent, Computershare Investor Services
Inc., in time for use at the Meeting. Holders of warrants and/or options should vote AGAINST the
9
Proposed Arrangement in the green and yellow proxies, as applicable, provided in conjunction
with the Management Circular.
Registered Shareholders
If you are a registered shareholder of the Company (meaning your Shares are held by you directly
and not by your broker or other intermediary), you should follow the procedures set out in the
enclosed GOLD form of proxy and as set out below.
In order to vote AGAINST the Proposed Arrangement, you should do the following:
(i) complete the GOLD form of proxy enclosed by marking:
• “AGAINST” with respect to the approval of the Proposed Arrangement; and
(ii) sign and date the GOLD form of proxy and return to Kingsdale by email or fax it back to
the number indicated on the GOLD form of proxy.
In order to ensure timely receipt before the deadline, the Concerned Shareholder recommends
that all registered shareholders who wish to vote “AGAINST” the Proposed Arrangement deliver
their GOLD proxy via email to Kingsdale at contactus@kingsdaleadvisors.com or by fax at
1.866.545.5580 or 416.867.2271.
Holders of Warrants and Options
If you are a holder of warrants and/or options of the Company you should follow the procedures
set out in the applicable green (warrants) or yellow (options) forms of proxy provided in
conjunction with the Management Circular and as set out below.
In order to vote AGAINST the Proposed Arrangement, you should do the following:
(i) complete the applicable green and/or yellow form of proxy enclosed by marking:
• “AGAINST” with respect to the approval of the Proposed Arrangement; and
(ii) sign and date the applicable form of proxy and return your proxy(ies) by (i) mail addressed
to Computershare Investor Services Inc., Proxy Department, 135 West Beaver Creek, P.O.
Box 300, Richmond Hill, Ontario, L4B 4R5; (ii) hand delivery to Computershare Investor
Services Inc., Proxy Department, 8th Floor, 100 University Avenue, Toronto, Ontario, M5J
2Y1; or (iii) fax to 1-866-249-7775 (toll free), 1-416-263-9524 (international).
In order to ensure timely receipt before the deadline, the Concerned Shareholder recommends
that all registered shareholders who wish to vote “AGAINST” the Proposed Arrangement deliver
10
their proxy via email to Kingsdale at contactus@kingsdaleadvisors.com or by fax at 1.866.545.5580
or 416.867.2271.
Revocation of Proxies
Shareholders may revoke a proxy already given pursuant to management's solicitation of proxies
by completing and delivering the enclosed GOLD form of proxy. A later dated GOLD form of proxy
revokes any and all prior proxies given by you in connection with the Meeting.
A registered shareholder who has given a proxy may also revoke it at any time before it is exercised
by an instrument in writing: (a) executed by that shareholder or by that shareholder’s attorney-in-
fact authorized in writing or, where the shareholder is a corporation, by a duly authorized officer
of, or attorney-in-fact for, the corporation; and (b) delivered either: (i) to the Company care of
the Company’s Corporate Secretary at Core Gold Inc., 1166 Alberni Street, Suite 1201, Vancouver,
British Columbia, V6E 3Z3, at any time up to and including the last business day preceding the day
of the Meeting or, if adjourned or postponed, any reconvening thereof, or (ii) to the Chair of the
Meeting prior to the start of the Meeting or, if adjourned or postponed, any reconvening thereof,
or (iii) in any other manner provided by law.
Also, a proxy will automatically be revoked by attendance at the Meeting and participation in a
poll (ballot) by a registered shareholder. A revocation of a proxy does not affect any matter on
which a vote has been taken prior to any such revocation.
KEITH PIGGOTT ENCOURAGES YOU TO SUBMIT YOUR PROXY AS SOON AS POSSIBLE AND
VOTE AGAINST THE PROPOSED ARRANGEMENT.
IN ORDER TO BE VOTED AT THE MEETING, YOUR PROXY MUST BE RETURNED TO KINGSDALE NO LATER
THAN 5:00 P.M. (VANCOUVER TIME) ON FRIDAY, JUNE 7, 2019. IF YOU CANNOT MEET THIS
DEADLINE, WE RECOMMEND THAT YOU EMAIL YOUR GOLD PROXY TO
CONTACTUS@KINGSDALEADVISORS.COM OR FAX YOUR GOLD PROXY TO KINGSDALE AT
1.866.545.5580 OR 416.867.2271 IN ANY EVENT. FOR ASSISTANCE, PLEASE CALL KINGSDALE AT
1.866.851.4179 TOLL-FREE IN NORTH AMERICA, OR 416.867.2272 OUTSIDE OF NORTH AMERICA, OR
BY EMAIL AT CONTACTUS@KINGSDALEADVISORS.COM.
Exercise of Discretion
The Shares represented by the enclosed GOLD form of proxy will be voted for, against or withheld
from voting, as applicable, in accordance with the instructions of the shareholder on any ballot
that may be called for at the Meeting or any adjournment(s) or postponement(s) thereof, and,
where you specify a choice with respect to any matter to be acted upon, the Shares will be voted
in accordance with your specification so made.
11
In the absence of such specification, Shares represented by the enclosed GOLD form of proxy will
be voted AGAINST the Proposed Arrangement in accordance with the Concerned Shareholder’s
recommendation as disclosed in this Circular. The enclosed GOLD form of proxy confers the
persons appointed under the proxy with discretionary authority (which they will exercise in
accordance with their best judgment) with respect to any variation or amendments to those
matters specified in the proxy and with respect to any other matters which may properly be
brought before the Meeting or any adjournment(s) or postponement(s) thereof. The Concerned
Shareholder is not currently aware of any such amendment, variation or other matter.
Non-Registered Shareholders
The information in this section only applies to shareholders who hold their Shares through a broker
or other Intermediary (as defined below).
Only registered shareholders of the Company or the persons they appoint as their proxyholders
are permitted to attend and vote at the Meeting. In many cases, Shares beneficially owned by a
person (a “Non-Registered Holder”) are registered either (i) in the name of an intermediary (an
“Intermediary”) that the Non-Registered Holder deals with in respect of the Shares (Intermediaries
include, among others, banks, trust companies, securities dealers or brokers and trustees or
administrators of self-administered RRSPs, RRIFs, RESPs and similar plans); or (ii) in the name of a
depository, such as CDS Clearing and Depository Services Inc. in Canada or The Depository Trust
Company in the United States.
The Concerned Shareholder has distributed copies of this Circular to the Depositories and
Intermediaries for distribution to the Non-Registered Holders. Intermediaries are required to forward
all meeting materials to Non-Registered Holders. Intermediaries often use service companies to
forward the meeting materials to Non-Registered Holders. In addition, Non-Registered Holders will
either:
(a) Receive a GOLD voting instruction form which is not signed by the Intermediary and which,
when properly completed and signed by the Non-Registered Holder and returned to the
Intermediary or its service company, will constitute voting instructions. Non-Registered
Holders should follow the instructions provided in the voting instruction form, using one of
the described voting methods provided, to vote their Shares.
(b) Less frequently, be given a GOLD form of proxy which has already been signed by the
Intermediary and which is restricted as to the number of Shares beneficially owned by the
Non-Registered Holder but which is otherwise not completed. In these cases, the
Non-Registered Holder must properly complete, sign and date the GOLD form of proxy
and submit it to Kingsdale.
The purpose of these procedures is to permit Non-Registered Holders to direct the voting of the
Shares they beneficially own. Should a Non-Registered Holder wish to attend and vote at the
Meeting in person (or to have another person appointed as proxyholder to attend and vote on
12
behalf of the Non-Registered Holder), the Non-Registered Holder should strike out the names of
the persons named in the GOLD form of VIF or proxy and insert the Non-Registered Holder's or such
other person's name in the blank space provided. In any case, Non-Registered Holders should
carefully follow the instructions of their Intermediary, including those regarding when and where
the VIF or the proxy (or any proxy authorization form) is to be delivered.
A Non-Registered Holder wishing to vote against the Proposed Arrangement should contact
Kingsdale at 1.866.851.4179 toll-free in North America or 416.867.2272 outside North America
(collect calls accepted) or by email at contactus@kingsdaleadvisors.com for assistance in
ensuring that the GOLD form of VIF or proxy is properly completed by the necessary person at their
Intermediary and that the Shares held are properly voted in accordance with the instructions of
the Non-Registered Holder.
A Non-Registered Holder may revoke a VIF or form of proxy given to an Intermediary or Broadridge
Financial Solutions, Inc. (“Broadridge”) at any time by voting again, as the latest GOLD VIF or form
of proxy will automatically revoke any previous ones already submitted or, by written notice to the
Intermediary in accordance with the instructions given to the Non-Registered Holder by its
Intermediary. A Non-Registered Holder should contact Kingsdale using any of the methods set out
in this Circular for assistance in ensuring that forms of proxy or voting instructions previously given
to an Intermediary or Broadridge are properly revoked.
Delivery of Proxy-Related Materials to Objecting Beneficial Holders
The Concerned Shareholder intends to pay for Intermediaries to deliver proxy-related materials to
“objecting beneficial owners” in accordance with National Instrument 54-101 – Communication
with Beneficial Owners of Securities of a Reporting Issuer.
AUDITOR
The Company’s auditor is Davidson & Company LLP, 1200 – 609 Granville Street, PO Box 10372,
Pacific Centre, Vancouver, British Columbia, Canada V7Y 1G6. According to the Management
Circular, Davidson and Company LLP has been the auditor of the Company since November 7,
2014.
ADDITIONAL INFORMATION
Additional information relating to the Company can be found on SEDAR at www.sedar.com.
Financial information regarding the Company is provided in its comparative financial statements
and management's discussion and analysis (“MD&A”) for its most recently completed financial
year, which can be found on SEDAR. In addition, shareholders may obtain copies of the
Company's financial statements and MD&A upon request to the Company by contacting the
Company’s Corporate Secretary at 604-345-4822 or by email at swong@coregoldinc.com.
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INFORMATION CONTAINED IN THIS CIRCULAR
Certain information concerning the Company contained in this Circular has been taken from or is
based upon publicly available documents including the Management Circular on SEDAR and
other public sources. Although the Concerned Shareholder has no knowledge that would
indicate that any statements contained in this Circular that are taken from or based upon those
documents and records or other public sources are untrue or incomplete, the Concerned
Shareholder does not assume and expressly disclaims any responsibility for the accuracy or
completeness of the information taken from or based upon those documents, records and other
public sources, or for any failure by the Company or Titan to disclose publicly events or facts that
may have occurred or that may affect the significance or accuracy of any such information, but
that are unknown to the Concerned Shareholder.
APPROVAL
Information contained in this Circular, unless otherwise indicated is given as of the date hereof.
The contents and the sending of this Circular to persons entitled thereto have been approved by
the Concerned Shareholder.
Dated as of May 22, 2019
“Keith Piggott”
KEITH PIGGOTT
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