Baja Mining Corp. (TSX:BAJ)(OTCQX:BAJFF) today advised shareholders
that it is reviewing a dissident circular issued late last week by
Mount Kellett Capital Management LP and will provide a complete
response in due course.
However, in response to the dissident's misleading comments
regarding Catalyst Copper Corp., Baja provides the following
interim statement:
Baja has no intention of investing in Catalyst
Baja's top priority and primary focus is bringing the Boleo mine
into full production. While Baja's management has considered
investing in Catalyst, Baja has no current intention of doing so.
If Baja's intention regarding Catalyst were to change it would only
be because the disinterested members of the Board believed such an
investment was in the best interests of Baja.
Baja's management is responsible for identifying and considering
attractive strategic opportunities to grow Baja's business over the
long term, including after the completion of the Boleo project. As
a result, from time to time Baja has explored strategic investment
opportunities and may do so in the future. This is a normal course
of business for a growing development-stage company such as
Baja.
Baja's Board is fully qualified and capable of making such
strategic decisions, notwithstanding Mount Kellett's contrary
suggestions. However, in the interest of allaying any possible
concerns, Baja commits that if John Greenslade is CEO of both
companies Baja will seek the approval of disinterested shareholders
prior to making any investment in Catalyst.
Mount Kellett was misleading on the Catalyst financing
Mount Kellett was misleading in its circular by omitting
reference to Catalyst's public disclosure about its financing.
Catalyst's disclosure stated that the financing totalled $3.5
million and had been completed. To be clear, this disclosure was
made on February 3, 2012, three weeks before Mount Kellett issued
its circular.
Rather than cite the facts, Mount Kellett chose to publish
false, anonymously-sourced conjecture that the investment was still
under consideration and entailed "the $38 million spare cash"
available to Baja. Mount Kellett was reckless, especially in the
middle of a proxy contest, to publish such conjecture.
Had Mount Kellett only asked, Baja would have responded that the
investment under consideration was never more than $5.5 million,
and that Baja's management decided not to proceed because the
investment would not be timely with respect to the current stage of
the Boleo project. Shareholders should wonder why Mount Kellett
made no attempt to cite facts in the public domain, and made no
attempt to verify conjecture.
Mount Kellett never previously raised concerns about
Catalyst
Mr. Greenslade many months ago discussed with Mount Kellett his
dual role as CEO of both Baja and Catalyst. Mount Kellett never
raised a concern while it:
-- Used stealth to accumulate 19.9% of Baja's shares last year;
-- Twice attempted to secure an exemption to the Shareholder Rights Plan in
May 2011 so it could increase its Baja holding to a control position of
more than 30%; and
-- Participated in dozens of meetings, calls or emails with Baja over
approximately 18 months prior to the publication of the dissident
circular.
Neither did Mount Kellett raise Catalyst as an issue in public
disclosure prior to the dissident circular. Catalyst never came up
in any of the four lengthy dissident news releases that Mount
Kellett issued over two months, starting with its meeting
requisition disclosure on December 16, 2011.
A new smokescreen for Mount Kellett's hidden agenda
And yet, Mount Kellett suddenly professes to be "particularly
concerned" about Catalyst. Shareholders should wonder why Mount
Kellett has chosen to raise it now, and with false,
anonymously-sourced conjecture.
The only credible answer is that Mount Kellett is still trying
to obscure its hidden agenda-obtaining control of Baja without
paying a premium. In Catalyst, Mount Kellett believes it has found
a new smokescreen to replace earlier smokescreens that Baja has
blown away.
Shareholders should be wary, especially since Mount Kellett
continues to reference its proposed "standstill" offer in January.
Mount Kellett falsely implies that the standstill would protect
Baja shareholders. Mount Kellett still has not explained that the
standstill was highly perishable, and allowed Mount Kellett to
launch a takeover bid for Baja just 15 days after Mount Kellett's
employee Stephen Lehner resigned from Baja's Board.
In light of Mount Kellett's consistent attempts to mislead and
omit relevant information, shareholders should be sceptical about
anything Mount Kellett says. Baja will provide further comment on
Mount Kellett's circular, including its silence on key issues
regarding Mount Kellett's hidden agenda, in due course.
Baja urges shareholders to vote only the GOLD proxy AGAINST
Mount Kellett's director removal resolution, and AGAINST Mount
Kellett's Board expansion resolution. Baja urges shareholders to
vote WITHHOLD for the two Mount Kellett nominees to the Board,
Stephen Lehner (an employee of Mount Kellett) and Lorie Waisberg.
Shareholders should discard any blue proxy they may receive and
should vote only their GOLD proxy well in advance of the proxy
voting deadline of March 30, 2012 at 10:00 a.m. (Vancouver
Time).
About Baja
Baja Mining Corp. (TSX:BAJ)(OTCQX:BAJFF) is a mine development
company with a 70 percent interest in the Boleo
copper-cobalt-zinc-manganese Project located near Santa Rosalia,
Baja California Sur, Mexico. Baja is the project operator and a
Korean syndicate of industrial companies holds the remaining 30
percent. Boleo is funded, currently under construction and targeted
for copper commissioning in 2012, and copper production in early
2013. Boleo has 265 Mt of measured and indicated resources
(including 85 Mt of proven and probable reserves) and 165 Mt of
inferred resources. A March 2010 updated technical report to the
2007 definitive feasibility study, confirmed that Boleo could be
developed economically at an after-tax IRR of 25.6 percent (100
percent equity), with a minimum scheduled mine life of 23 years
(during which approximately 70 Mt of the noted proven and probable
reserves will be exploited), a NPV of US$1.3 billion (8 percent
discount rate), and an average life-of-mine cash cost of negative
US$0.29/lb for copper, net of by-product credits. Metal Prices were
based on SEC pricing guidelines (which at the time of the 2010
report were US$2.91/lb Cu, US$26.85/lb Co and US$1,175/tonne
ZnSO4H2O). For more information, please visit
www.bajamining.com.
On behalf of the Board of Directors of Baja Mining Corp.
John W. Greenslade, President & Chief Executive Officer
Forward-Looking Statements
This news release contains forward-looking statements.
Forward-looking statements are statements that relate to future
events or financial performance, anticipated developments at the
Company's projects and the projected performance and economics of
the Boleo Project. In addition, estimates of mineral reserves and
resources and NPV estimates may be forward-looking statements
because they represent estimates of mineralization, costs, revenues
and other factors that may be encountered in the future.
Forward-looking statements speak only as of their date, are only
predictions and are subject to known and unknown risks,
uncertainties and other factors, including without limitation those
described in Baja's most recent annual information form filed under
its profile at www.sedar.com and its most recent annual report
filed with the US Securities and Exchange Commission ("SEC") at
www.sec.gov. All forward-looking statements in this news release
are qualified by these cautionary statements. These risks, as well
as risks that the Company cannot currently anticipate, could cause
the Company's or its industry's actual results, levels of activity
or performance to be materially different from any future results,
levels of activities or performance expressed or implied by these
forward-looking statements. Although the Company believes that the
expectations reflected in the forward-looking statements included
in this press release are reasonable, the Company cannot guarantee
future results, levels of activity or performance. Except as
required by applicable law, the Company does not intend to update
any of these forward-looking statements to conform them to actual
results.
Cautionary Note Regarding References to Resources and
Reserves
National Instrument 43 101 - Standards of Disclosure for Mineral
Projects ("NI 43-101") is a rule developed by the Canadian
Securities Administrators which establishes standards for all
public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Unless otherwise
indicated, all reserve and resource estimates contained in this
press release have been prepared in accordance with NI 43-101 and
the guidelines set out in the Canadian Institute of Mining,
Metallurgy and Petroleum (the "CIM") Standards on Mineral Resource
and Mineral Reserves (the "CIM Standards").
United States shareholders are cautioned that the requirements
and terminology of NI 43-101 and the CIM Standards differ
significantly from the requirements and terminology of the SEC set
forth in the SEC's Industry Guide 7 ("SEC Industry Guide 7").
Accordingly, the Company's disclosures regarding mineralization may
not be comparable to similar information disclosed by companies
subject to SEC Industry Guide 7. Without limiting the foregoing,
while the terms "mineral resources", "inferred mineral resources",
"indicated mineral resources" and "measured mineral resources" are
recognized and required by NI 43-101 and the CIM Standards, they
are not recognized by the SEC and are not permitted to be used in
documents filed with the SEC by companies subject to SEC Industry
Guide 7. Mineral resources which are not mineral reserves do not
have demonstrated economic viability, and US investors are
cautioned not to assume that all or any part of a mineral resource
will ever be converted into reserves. Further, inferred resources
have a great amount of uncertainty as to their existence and as to
whether they can be mined legally or economically. It cannot be
assumed that all or any part of the inferred resources will ever be
upgraded to a higher resource category. Under Canadian rules,
estimates of inferred mineral resources may not form the basis of a
feasibility study or prefeasibility study, except in rare cases.
The SEC normally only permits issuers to report mineralization that
does not constitute SEC Industry Guide 7 compliant "reserves" as
in-place tonnage and grade without reference to unit amounts. In
addition, the NI 43-101 and CIM Standards definition of a "reserve"
differs from the definition in SEC Industry Guide 7. In SEC
Industry Guide 7, a mineral reserve is defined as a part of a
mineral deposit which could be economically and legally extracted
or produced at the time the mineral reserve determination is made,
and a "final" or "bankable" feasibility study is required to report
reserves, the three-year historical price is used in any reserve or
cash flow analysis of designated reserves and the primary
environmental analysis or report must be filed with the appropriate
governmental authority.
Contacts: Shareholders: Laurel Hill Advisory Group Toll-free
1-877-304-0211 Collect: 416-304-0211assistance@laurelhill.com
Media: Longview Communications Alan Bayless
604-694-6035abayless@longviewcomms.ca Longview Communications Joel
Shaffer 416-649-8006jshaffer@longviewcomms.ca
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