An anonymous director reports
WEXFORD RESPONDS TO ORO MINING'S DIRECTORS' CIRCULAR
Wexford Capital LP responded today to the directors circular filed by the board of
directors of Oro Mining Ltd.
Wexford Spectrum Trading Ltd. and Wexford Catalyst Trading Ltd.,
private investment funds affiliated with and managed by Wexford, have
offered to purchase any and all common shares of Oro Mining at a price of 11 cents per share.
The Wexford offer is at a substantial premium to market. The Wexford offer is a premium of approximately 57.1 per cent over the
closing price of the shares on June 13, 2012, and a premium of
approximately 76.3 per cent over the 60-day volume-weighted average closing
price of the shares. The board's comparison of the Wexford offer with
the closing price of 13 cents on June 1, 2012, is misleading. The board
fails to disclose that there was a single trade of 1,000 shares at
13 cents per share (or $130 worth of volume) and that the shares did not
otherwise trade above eight cents on that day.
The Wexford offer is not coercive. The Wexford offer is available to any and all shareholders of Oro
Mining who wish to sell their shares at a substantial premium to the
public-market trading prices for the shares. The board's contention
that the Wexford offer is coercive is false.
The Wexford offer is a firm offer. The Wexford offer is not subject to a minimum tender condition, due
diligence, a financing contingency or other similar conditions. The
board's assertion that the Wexford offer is "highly conditional and not
a firm offer" is false.
The Wexford offer is an all-cash bid. This bid creates immediate and tangible value for shareholders while
removing exploration, development and operational risks going forward.
The special committee members do not have a meaningful economic interest
in Oro Mining. Wexford holds approximately 21.1 per cent of the outstanding shares of Oro
Mining. By contrast, the special committee members own only 0.4 per cent of the
outstanding shares, and one member of the special committee owns no
The board has not provided adequate leadership to Oro Mining. Since May 18, 2007, when the chairman of Oro Mining was first
nominated to the board of Oro Mining's predecessor, the share price has
declined from a closing price of 81 cents to a closing price of seven cents the
day before the Wexford offer was announced, a loss of shareholder value
of over 90 per cent. Oro Mining faces substantial challenges that, if not
adequately addressed, may further impair shareholder value. Other
shareholders have advised Wexford that they lack confidence in the
The Wexford offer is the only bona fide offer open to shareholders of
Oro Mining. Oro Mining has not offered any viable alternative to the Wexford
Oro Mining requires substantial additional capital. Oro Mining estimates that it needs at least $28-million to develop
its Taunus project, yet it has only approximately $7.5-million of cash
on hand and no existing bank or credit facility, equity commitment or
other available source for additional funds. Any financing
alternatives available to Oro Mining are likely to impose onerous
restrictions on Oro Mining and/or be highly dilutive to existing Oro
Mining shareholders. The all-cash Wexford offer creates immediate and
tangible value for shareholders while removing exploration, development
and operational risks going forward.
The Wexford offer is open for acceptance until Aug. 9, 2012, at 5 p.m. (Eastern Time).
Pursuant to the Wexford offer, Oro Mining shareholders will receive
11 cents in cash per common share of Oro Mining. The Wexford offer will
be open for acceptance until Aug. 9,
2012, at 5 p.m. (Eastern Time) unless extended, varied or withdrawn. The Wexford offer is
subject to certain conditions, including there being no adverse
material change to Oro Mining. Full details of the terms and
conditions of the offer are set out in the formal offer and takeover
Copies of the offer, takeover bid circular and related documents are
also available through the Internet at SEDAR.
We seek Safe Harbor.