|January 23, 1996
JIM SINCLAIR PUBLISHES DEFAMATORY LETTER,
Richmond, British Columbia -
The management of Sutton Resources Ltd. announced today Jim Sinclair, Sutton's former
chairman, released to the press yesterday a defamatory letter riddled with factual
RIDDLED WITH FACTUAL MISSTATEMENTS,
TO PRESIDENT OF SUTTON RESOURCES
"We had hoped Jim Sinclair would participate in his wife's proxy contest in a more
legitimate manner. At the very least, we had assumed we could rely upon Jim
Sinclair to tell our shareholders the true and correct facts", stated Michael
Kenyon, Suttons president.
According to the Company, Sinclair misstated the following facts in his January 22
letter to Sutton's president:
- I am a member of Sutton's Option Committee.
- Mr. Sinclair knows this is untrue.
On December 18, 1995 Mr. Sinclair was removed from all his committee memberships,
and as an officer or director of each and every one of the Company's subsidiaries,
by the unanimous vote of all directors in attendance at that meeting of Sutton's
Board of Directors.
Mr. Sinclair received proper notice of the December 18 directors' meeting, but
chose not to participate. Mr. Sinclair received and commented upon the minutes of
that meeting. He receives notice and is entitled to attend all Board meetings.
- The issuance of Incentive Stock Options
requires prior notice and shareholder approval.
- Mr. Sinclair knows this is untrue.
The Board of Directors, including Jim Sinclair and Frank Vogl, approved an
Incentive Stock Option Plan. Shareholders of Sutton Resources, including Jim and
Barbara Sinclair, voted to approve the Company's Incentive Stock Option Plan at
Sutton Resource's Annual General Meetings in June 1994 and again in June 1995.
The Incentive Stock Option Plan gives full power to the option committee to deal
with options. No further notice or approval is required to implement the plans
Jim Sinclair currently holds rights to exercise the largest aggregated amount of
outstanding stock options (160,000 shares).
- Management is Attempting to Entrench Itself with Options.
- Mr. Sinclair's statement is silly.
Management cannot entrench itself with options.
Options do not have voting rights.
The new options granted to directors and officers are priced at Cdn $17.38 per
share. This is higher than current market. For the most part, the options granted
simply replace old option positions, some going back years.
All the original options were approved by Jim Sinclair.
- The option transactions are manipulative and improper.
- This statement by Mr. Sinclair is also silly.
The options were exercised pursuant to already existing options with the cash
going to fund the company. Sales of the shares purchased were completely proper.
There were no legal or other impediments to the rights of the optionees.
The new options granted replace old options. They are exercisable at current
market prices, that is, at prices higher than the old options. Some old options,
deep out of the money, were repriced to current market. All of this was done
pursuant to the plan previously approved by Jim and Barbara Sinclair and Sutton's
- Management is manipulating the corporate machinery to
violate shareholders rights.
- Mr. Sinclair's statement is defamatory.
Management is upholding shareholder rights. On January 5, the Company set an
Extraordinary Meeting of Shareholders to be held on April 11. Shareholders will
vote on the destiny of Sutton.
- Management will find it more difficult, if not impossible,
to raise new money from the capital markets.
- Mr. Sinclair is wrong.
Financial Firms and major investors are calling daily with offers to finance
Sutton's projects. Interest in Sutton Resources Ltd. has never been stronger.
Major Canadian institutions made a substantial investment in Sutton Resources Ltd.
last week, despite Jim Sinclair's attempt to strangle the Company's ability to
HERE IS WHAT REALLY HAPPENED:
Sutton's Management assisted the Company by exercising their existing options to
finance the company when Mr. and Mrs. Sinclair placed it in difficult
circumstances. Management had the right to do this at any time.
Sutton's president, Michael Kenyon, concluded:
In order to fund ongoing programs at Bulyanhulu, certain officer and directors
of Sutton exercised existing option on 407,000 shares. This resulted in the
Company receiving a cash infusion of approximately Cdn $4.5 million. The shares
were then resold, by private contracts, at a discount from the current market to
The additional funds are being used to finance further development of Sutton's
world class Bulyanhulu gold project in Tanzania where nearly 3.5 million ounces
of gold has been identified so far.
All of Sutton's shareholders will benefit.
Barbara Sinclair profited handsomely from her sale of 220,000 shares on
December 15, 1995. Sutton received no funds from that transaction.
Only she benefitted.
"Our shareholders have once again been treated to Jim Sinclair's re-fashioned
version of Sutton's history. The truth always comes out. I am confident our
shareholders will support Management rather than the Sinclair's self-interest."
For more information, contact:
Michael Kenyon, President
SUTTON RESOURCES LTD.
205 - 10711 Cambie Road
Richmond, British Columbia
Tel: (604) 276-2576
Fax: (604) 278-8837
Internet URL: http://www.info-mine.com/sutton/
Produced for the INFO-MINE, the
Internet's premier mining information site, by Robertson Info-Data Inc.
Tel: +1 604 683-2037 - Fax: +1 604 681-4166