Lang hangs on to Valerie Gold

Vancouver — Frank Lang managed to stave off a contentious proxy fight as shareholders voted almost two-to-one to keep his management team at the helm of Valerie Gold Resources (VLG-V).

Less than half the 12.5 million eligible shares were voted at the annual general meeting. Lang, Valerie’s president, and his slate of five directors received 3.6 million shares, while the dissident groups’ six directors received 1.9 million.

“We are gratified and most appreciative of the overwhelming support management received from our shareholders,” says a relieved Lang.

The fight for control of Valerie Gold began in early January, when Atna Resources (ATN-T) formed a limited partnership called Valerie Good Corporate Governance (VGCG) and tabled a dissident proxy circular aimed at removing Valerie Gold’s board of directors. Atna, which holds 750,000 shares, or 6%, of Valerie Gold’s stock, put up $150,000 to finance the fight (T.N.M., Jan. 14-20/02).

The limited partnership, which was formed in mid-December 2001 in the Northwest Territories, accuses Valerie Gold’s current management of poor corporate governance, lack of good business judgment, and various conflicts of interest.

Despite the clear majority in favour of Lang’s nominees, the dissident group maintains that their fight was successful insofar as its slate of contenders received more votes than management’s slate, excluding the votes of Valerie Gold’s insiders. At the time of the meeting, Lang and his immediate family held 1.8 million shares of Valerie Gold. VGCG is optimistic its efforts will be the catalyst for improved transparency in management at the company.

“With the substantial number of shareholders voting in favour of the VGCG slate of directors, Valerie management must recognize that shareholders are demanding a change in the way the company conducts its affairs,” says David Watkins, a VGCG board nominee and president of Atna. “In particular, Valerie’s disaffected shareholders have put management on notice that they must recognize that conflicts of interest and the appearance of self-serving transactions by insiders are not acceptable.”

At the meeting, Watkins continued to hammer away at the issue of interest-free loans handed out by Valerie Gold to Lang Mining, a private management group headed by Frank Lang. According to Watkins, loans of up to $570,000 have been made to management, without interest charges, without a repayment schedule and without security as collateral. Watkins strongly requested that these loans be paid back immediately in cash.

Lang responded by stating that all the financial transactions are a matter of public record and that the meeting was only to address the election of directors for the company. Management of Valerie Gold has stated, throughout the proxy fight, that Atna just wanted to gain control of its $2.9 million treasury.

With the proxy fight over, Valerie Gold is moving ahead with a number of exploration projects. This month, the junior is expected to start drilling at the Crystal Lake diamond property, 50 km southeast of Gillam, Man. The initial, 750-metre program will test eight geophysical anomalies.

The company is also exploring several early-stage platinum-palladium properties in northern Ontario. Valerie Gold also holds: the Walker Lane gold property in Nevada’s Mineral Cty.; the right to earn a 60% stake in the Starlight diamond property in Manitoba; an original $1.5-million equity stake, now valued at about $700,000, in Northern Orion Explorations (NNO-T); 665,000 shares of Sultan Minerals (SUL-V); 400,000 shares of Emgold Mining (EMR-V); 50,000 shares of Manhattan Minerals (MAN-T); and 135,000 shares of Cream Minerals (CMA-V).

“Valerie stands to profit from its substantial investments in Northern Orion, which holds a significant portfolio of advanced mineral projects in South America,” says Lang, who also expressed enthusiasm for Sultan Minerals’ Kena gold project in southwestern British Columbia.