This announcement contains inside information

6 September 2021

Ormonde Mining plc

("Ormonde" or "the Company")

Reconvening of AGM and Letter from the Executive Chair

The Company announces the reconvening of its adjourned Annual General Meeting ("AGM") on Thursday, 30 September 2021 at 11 a.m. IST/BST, at the Carlton Hotel Blanchardstown, Dublin 15, Ireland.

A Letter from the Executive Chair, Notice of AGM and Form of Proxy are being posted to shareholders today, along with a letter from Mr. Thomas Anderson, a shareholder of the Company, and are also available on the Company's website www.ormondemining.com.

Shareholders are urged to read the note section of the Notice of AGM for important information pertaining to voting, attending the meeting and associated Covid-19 safety measures. Some high-level information in this regard is provided at the end of this the release.

The letter from the Executive Chair, Jonathan Henry, is provided below which explains the resolutions to be proposed at the AGM and the Board's recommendations thereon.

LETTER FROM THE CHAIR

Dear Shareholder,

I am writing to you to explain the resolutions to be proposed at the forthcoming Annual General Meeting of the Company ("AGM") which is to be reconvened on Thursday 30 September 2021 at 11 a.m. IST/BST at the Carlton Hotel Blanchardstown, Church Road, Tyrrelstown, Blanchardstown, Dublin 15, Ireland. A copy of the Notice of AGM is enclosed with this letter which provides details on how shareholders can vote and/or attend the meeting.

This letter contains some important background and explanatory notes in relation to the resolutions being proposed at the AGM and to the Board's recommendations thereon, which are set out in conclusion at the end of this letter. Please read this letter in its entirety to ensure that you, as a shareholder, are well informed on the issues at hand, together with the consequences of your voting, and are able to exercise that vote based on such material information.

As announced on 29 June 2021, Mr. Thomas Anderson, who has informed the Company that he has a beneficial interest of 23.02% of the Company's voting shares, requested that two new ordinary resolutions relating to new director appointments be added to the AGM agenda. One of the proposed directors subsequently withdrew his nomination and, as announced on 31 August 2021, an updated requisition was received nominating Mr. Brendan McMorrow and Mr. Keith O'Donnell as Mr. Anderson's two new nominee directors.

Having regard to the substance of the matters addressed in this letter, Mr. Brian Timmons, who was appointed as a director of Ormonde in June 2020 to represent Mr. Anderson, recused himself from the Board's discussions in relation to, and the decision to issue this letter. Mr Timmons has indicated to the Board that he supports the new board nominations and is recommending the associated resolutions to shareholders.

This letter and the recommendations contained within have been agreed unanimously by the other board members, being myself and Mr. Tim Livesey and Mr. Richard Brown, who are both deemed independent by the entire Board.

I would like to advise all shareholders to carefully consider the two new director nominations, in addition to Mr. Timmons, recently requisitioned by Mr. Anderson, especially in relation to the matters summarised below and explained further in the body of this letter:

·    if these nominations are approved by shareholders at the AGM, then three of the six directors on the revised board of directors, and possibly three of five in the circumstances where Mr. Tim Livesey is not re-elected, would be Mr. Anderson's appointees. The Board considers 50% or higher board representation by a 23% shareholder to be disproportionate and potentially unfair to the interests of the remaining shareholders;

·    while Mr. Anderson has indicated that his proposal should find favour as the Chair has a casting vote should there be deadlock of voting at a meeting of an enlarged board, there is no guarantee that Mr. Anderson will not exercise his right to vote against a director being re-elected on retirement by rotation (including Mr. Livesey at the AGM) thereby giving rise to his representatives on the Board being able to cast a majority of the votes;

·    your Board therefore strongly believes such nominations to be indicative of an attempt to exert a level of influence whereby Mr. Anderson is seeking to ultimately obtain control of the Board without paying shareholders a fair price for obtaining de facto control of the Company and its assets;

·    Mr. Anderson maintains that his strategy for Ormonde is to continue the search for opportunities in the mining sector.  However, despite repeated requests for clarification, your Board believes that   Mr. Anderson has not been fully transparent in relation to his future intentions and strategy for the Company. The Board also believes that neither of Mr. Anderson's board nominees bring specific attributes which would further the Company's ability to attract or assess projects in the mining sector which are not already available within the existing Board's expertise; 

·    over the last year, Mr. Anderson has not supported the Board in the pursuit of its strategy, and has made it clear to the Board that if this strategy does not succeed, the Company will have to reconsider an alternative strategy and it is for this reason it should have directors with a wider viewpoint;

·    Mr Anderson has sought to have the Company make investments that the Board could not execute for technical, commercial or regulatory reasons and he has represented that he is aware of possible projects for investment by Ormonde, which he plans to table, but not until the appointments of his nominee directors have been approved. The Board believes that the approval of his nominees would provide Mr. Anderson with a level of influence that could adversely affect the impartiality, or perceived impartiality, of the Board to make recommendations in the best interests of the majority of shareholders;

·    Mr. Anderson has been offered a compromise position which would have seen one additional director proposed (bringing his appointees to 40% of the enlarged board), and for that board to adopt a mandate to assess a change in strategy and/or a change to the appropriate skills necessary at board and management level that could be needed to implement that revised strategy. However, Mr. Anderson has insisted upon two additional appointees;

·    Mr. Anderson has informed the Board that, should resolutions to appoint his two nominees not be included in the notice of the AGM, he will requisition an extraordinary general meeting for the appointment of three new directors which would, if those proposals are adopted, ensure that a majority of the resultant Ormonde board are his nominees; and  

·    given the difficulties encountered with obtaining Mr. Anderson's support and decreasing cash resources, earlier this year the Board considered the option of winding up the Company with the goal of returning as much cash as possible to shareholders. However, the Board was informed that Mr. Anderson would not support this option. 

In the context of the above, and for the reasons set out below, the Board recommends that shareholders vote AGAINST Resolutions 7 and 8, being the resolutions proposed by Mr. Anderson

With regard to the resolutions relating to an increase to the authorised share capital of the Company, share allotment authority and disapplication of pre-emptive rights, the Board wishes to highlight the following points:

·    following Mr. Anderson submitting proxy votes against the standard form resolutions (which he had not opposed in prior years) relating to the issuance of shares at the Company's 2020 AGM, Ormonde has been severely restricted in its ability to complete any material transaction, due to an inability to use its shares as part or full consideration for an acquisition;

·    given the consequent uncertainty caused to counterparties to potential transactions the Board is now also seeking support for an increase in the Company's authorised share capital from 650 million to 950 million ordinary shares.  If passed, this would enable the Company to issue a greater number of shares as consideration in a potential transaction, should the Board believe it to be in the interest of all shareholders.  Importantly, this would remove the current uncertainty for potential counterparties in relation to the Board's ability to transact, and potentially increase the number of possible opportunities but would not empower the directors to allot shares for cash otherwise than on a pre-emptive basis and would be subject to the usual AIM and Euronext Growth Market Rule requirements, including in relation to reverse takeover shareholder approval and related party transactions; and

·    should shareholders not support these resolutions at the upcoming AGM, the Board's ability to engage effectively with counterparties in regard to possible projects and complete any transaction will continue to be severely limited. The consequences of such an outcome may be far reaching, including the continued inability to negotiate and conclude an acquisition, cash resources depletion and ultimately endangering Ormonde's continued suitability for listing.

The Board recommends that shareholders vote IN FAVOUR of Resolutions 1 to 6

Company strategy

Your Board has been pursuing a clear strategy to acquire, explore and develop mining projects in which it has a controlling interest. The Company has spent considerable time and resources identifying and evaluating new opportunities for the deployment of the Company's capital and enhancement of shareholder value through the acquisition of a transformative project for the Company.

However, progress in this regard was slowed, and has ultimately stalled, in the opinion of the Board, following interactions with Mr. Anderson, as summarised in this letter, together with the share allotment authority resolutions not being passed at the last AGM. Such flexibility would, for example, allow Ormonde to utilise shares as initial consideration for an earn-in to a project, enabling the Company to protect its cash balances for utilisation in moving any such project forward, and to assess the potential of that project ahead of taking control (having obtained any necessary Ormonde shareholder approval) at a later stage.

Prior to the 2020 AGM your Board believed it had the support of Mr. Anderson for this strategy and had some success initiating promising transactions on that basis. However, due to the circumstances described herein, your Board currently has an extremely limited ability to progress negotiations on such transactions.

Proposed nomination of directors by Mr. Anderson

As announced on 29 June 2021, Mr. Anderson proposed the nomination of two new directors to the Board, and if these nominations are approved by shareholders at the AGM then three of the six directors, and possibly three of five in the circumstances where Mr. Tim Livesey is not re-elected, on the revised board would be Mr. Anderson's appointees (including his existing appointee, Mr. Timmons). The Board considers 50% or higher board representation by a 23% shareholder to be disproportionate and potentially unfair to the interests of the remaining shareholders.

Since that date, one of the proposed directors withdrew his nomination.  A replacement for this nominee has now been tabled by Mr. Anderson, with Mr. Brendan McMorrow and Mr. Keith O'Donnell now the two nominated directors.

The Board has conducted limited due diligence on both nominees and is of the view that, notwithstanding the Board has no reason to believe that they would not be suitable for board appointments generally, absent the requisition by Mr. Anderson and given the scale, activity and cost base of the Company, neither are appropriate or necessary candidates to add to the Board at this juncture. Your Board believes that they bring no specific attributes not already available within the existing Board which would further the Company's ability to attract or assess projects in the mining sector and would not be considered by the Board to be independent (given their nomination by, and/or the Company's understanding of their personal or professional association with, Mr. Anderson and each other).

Whilst Mr. Anderson has represented that new directors with substantial corporate experience would bring a completely new breadth of experience and depth of knowledge to Ormonde, the view of the Board differs if the future strategy of the Company is to remain in the exploration and development of mining projects.  As noted above, Mr. Anderson has made it clear to the Board that if this strategy does not succeed, the Company will have to reconsider an alternative strategy and it is for this reason it should have directors with a wider viewpoint.

The Board, therefore, does not see the incremental value such nominees would bring to Ormonde's current strategy, and whilst Ormonde continues to search for opportunities in mining exploration and development the Board believes that its current composition and structure is appropriate, being four directors - one executive, Mr. Jonathan Henry, and three non-executives. The non-executive directors currently comprise two independent directors, Mr. Richard Brown and Mr. Tim Livesey, and one non-independent director (i.e., 25% of the Board), Mr. Timmons, who was appointed to represent the interests of Mr. Anderson and who already brings wide corporate experience across several sectors.

In an attempt to address this, Mr. Anderson was offered a compromise position whereby Ormonde would potentially accept one new director, with relevant skills and experience so as to enhance the current board and with a strong preference for a female candidate so that the Board may meet an immediate diversity target set by the Secretariat of the Balance for Better Business, Gender Equality Division, part of the Irish Department of Justice and Equality that is becoming increasingly urgent and to which Ormonde has committed. This would take Mr. Anderson's appointed nominees to 40% of the Board and allow the enlarged Board to work towards agreeing a strategy and direction for the business in the interest of all shareholders.

It was also made known to Mr. Anderson that the Board would be open to assessing a change in strategy and/or a change to the appropriate skills necessary at Board and management level that could be needed to implement that revised strategy, were this compromise to be accepted.  This would have allowed the Board to work with Mr. Anderson to agree and then transition to any changed strategy and/or Board and management, while ensuring that all shareholders interests were protected.

Despite these proposals, which the Board considers to be reasonable, and numerous requests for clarification on his strategy and intentions, it appears that Mr. Anderson is unwilling to accept any position other than a representation on the Board of at least three directors being at his nomination.

Board interactions with Mr. Anderson

The Board seeks to manage the Company's affairs in line with the governance required of a company whose shares are traded on the AIM Market and the Euronext Growth Market and the level of shareholder consultation consistent with such governance. However, Mr. Anderson has sought to become involved in the decision making of the Board, including the assessment and rejection of project opportunities under consideration, which the Board has made efforts within governance practices to facilitate in an attempt to maintain a healthy working relationship with its largest shareholder.

In addition, Mr. Anderson has proposed investments to the Board for consideration, at a level without project or corporate control, and some involving minority participation in existing public company fundraisings.  Mr. Anderson has been given objective and reasoned appraisals outlining the technical, commercial or regulatory reasons why the Board could not recommend such potential investments as being in the interests of shareholders as a whole, whereas it could progress assessment of other long-term opportunities. Unfortunately, such other opportunities have so far failed to garner his support.

Consequently, your Board has spent a vast amount of time in consideration of the situation and communication with Mr. Anderson, both through Mr. Timmons and in direct correspondence. Neither avenue has elicited a clear strategy for the Company which Mr. Anderson has indicated he would support unconditionally.

Ormonde has been severely restricted in its ability to continue to attract the interest of potential counterparties with suitable projects since the last AGM. Ultimately Ormonde remains unable to attract project vendors and is without the power to structure any deals or complete any significant transaction which the Board believes would be in the best interests of all shareholders unless it can obtain your favourable votes for Resolutions 1 to 6.

After due deliberation, Mr. Anderson has been advised that the independent non-executive directors could not contemplate supporting a major governance and oversight decision such as his proposed Board changes, on behalf of the shareholders as a whole, without a fundamental and detailed understanding of the strategic intentions behind those proposals, including the nature of possible projects for investment by Ormonde, which it is understood Mr. Anderson plans to table but not until the appointments of his nominee directors have been approved.

Given the situation, earlier this year the Board considered the option of winding up the Company with the goal of returning as much cash as possible to shareholders. However, the Board was informed that Mr. Anderson would not support this option. 

Mr. Anderson has requested his views be made clear to shareholders and has recently submitted a letter to the Company for the attention of its shareholders.  The letter from Mr. Anderson accompanies this letter. The Board strongly disagrees with a number of Mr. Anderson's views and recollection of events, especially as regards the number of opportunities shared with him by the Company and his stated understanding of the facts pertaining to them. Furthermore, Mr. Anderson has his own nominee on the Board dedicated to representing his interests in Mr. Timmons, who, since his appointment, has been present and supportive in the majority of Board discussions and decisions including those relating to the opportunities reviewed and pursued with Mr. Anderson.

AGM Resolutions

The Board believes it is in the best interests of shareholders as a whole to have a vote on the future of the Company and not to prolong this impasse and operational stasis any longer, not least as the cash available to the Company reduces daily. 

Accordingly, following receipt of an amended requisition for nominee directors on behalf of Mr. Anderson, the Notice of AGM enclosed with this letter will consider two resolutions for the appointment of new directors (Resolutions 7 and 8).  For all the reasons given above, the Board (with the exception of Mr. Anderson's current board representative, Mr. Timmons, who has recused himself from this decision) is recommending that you vote against these two resolutions.

The Notice of AGM also includes typical resolutions on approval of accounts, non-executive director re-election (on rotation), and authorisations to fix the auditors remuneration and issue shares and dis-application of pre-emption rights, these being the standard authorities to allow the Board and Company to function normally and in the best interests of all shareholders, together with an increase of authorised share capital. These are covered by Resolutions 1 to 6. I would emphasise the importance of shareholders voting in favour of these resolutions, which the Board recommends regardless of the voting position to be taken with respect to new Board nominees, as the successful passing of these resolutions is essential to provide the Board with the flexibility required to have a realistic opportunity to deliver a material acquisition as a platform to enhance the long-term value of the Company. 

Should Resolutions 2, 4, 5 and 6 not be approved, the Board's ability to engage seriously with counterparties in regard to possible projects and complete any transaction will continue to be severely limited. The consequences of such an outcome may be far reaching, including the continued inability to negotiate and conclude transactions due to the lack of confidence potential counterparties would have in the ability of the Board to obtain approval for any transaction, cash resources depletion and ultimately a danger to Ormonde's continued suitability for listing.

Resolutions 1 to 6 - Proposed by the Board

The Board recommends that you vote in favour of each of Resolutions 1 to 6:

Resolution 1 - Receipt and Consideration of the Accounts

This is an ordinary resolution to receive and consider the Company's financial statements for the financial year ended 31 December 2020.

Resolution 2 - Election of Director

Resolution 2 is an ordinary resolution to re-elect Mr. Timothy Livesey as a Director, following his re-election to the Board at the 2020 AGM. Under the provisions of the Articles of Association of the Company at least one director is required to retire by rotation at the AGM and offer themself for election by shareholders (by separate resolution).  Mr. Livesey, as senior independent director, has agreed to retire by rotation and offer himself for re-election.

Resolution 3 - Auditors' Remuneration

Resolution 3 is an ordinary resolution proposed each year to permit the directors to fix the Auditors' remuneration. The directors will have this authority no matter who is auditor.

Resolution 4 - Increase to Authorised Share Capital

Resolution 4 is an ordinary resolution to grant a general authority to the directors to increase the authorised share capital of the Company by the creation of 300 million Ordinary Shares of €0.01 each, resulting in an increase in Ordinary Shares from 650 million to 950 million shares. 

Resolution 5 - Allotment of Relevant Securities

Resolution 5 is an ordinary resolution to grant a general authority to the directors to allot "relevant securities" of up to an amount equal to the authorised but yet unissued share capital of the Company. In practice, this is a public company resolution sought annually and this right provides the directors with the ability to use the Company's shares as part or full consideration for a transaction. As noted above and repeated here, the Board considers the passing of this resolution as being critical to provide it with the minimum flexibility required to have a realistic opportunity to deliver a material acquisition as a platform to enhance the long-term value of the Company.

The Board considers the passing of Resolutions 4 and 5 as being critical to provide it with the flexibility required to have a realistic opportunity to deliver a material acquisition as a platform to enhance the long-term value of the Company.

Resolution 6 - Allotment of Equity Securities

Resolution 6 is a special resolution to authorise the directors to allot "equity securities", essentially non-pro-rata issues for cash of ordinary shares of a nominal value equivalent of up to 10% of the nominal value of the issued share capital and issues of shares relating to the grant of any share options or share warrants or the exercise thereof.  This resolution also provides the Board with an additional degree of flexibility as it works with management to implement a value enhancing transaction.

The authorities provided by Resolution 5 and 6, if passed, would expire 15 months after the passing of Resolutions 5 and 6 (respectively) or at the conclusion of the next AGM of the Company, whichever occurs first.

Resolutions 7 and 8 - Proposed by Mr. Anderson

The Board recommends that you vote against Resolutions 7 and 8.

Resolution 7 - Election of Director

Resolution 7 is an ordinary resolution proposed by Mr. Thomas Anderson to elect Mr. Keith O'Donnell as a director.

Resolution 8 - Election of Director

Resolution 8 is an ordinary resolution proposed by Mr. Thomas Anderson to elect Mr. Brendan McMorrow as a director.

Recommendation

There is no guarantee that Mr. Anderson (and/or shareholders as a whole) will vote in favour of the re-election of Mr. Livesey at the forthcoming AGM. Should Mr. Livesey not be re-elected and Mr. Anderson's resolutions for nominee directors are passed, Mr. Anderson would have appointed a majority of the Board and hence potentially have the ability through those directors to control the destiny of the Company.

Taking into account all of the above, and based on the Board's interaction with Mr. Anderson, the Board strongly believes such nominations to be indicative of an attempt to exert a level of influence whereby Mr. Anderson is seeking to ultimately obtain control of the Board without paying shareholders a fair price for obtaining de facto control of the Company and its assets. Thereby, Mr. Anderson will not incur the usual premium to the current share price, nor the significant advisory expenses and cash cost of acquiring a controlling shareholding in a public company, as such denying what would be fair compensation to other shareholders.

Shareholders are faced with an important choice, which can be summarised as follows:

Either: to support your Board to progress Ormonde's stated strategy of seeking a transformative transaction for the Company (which has been severely hampered in the last year) through the approval of resolutions providing the Board with additional flexibility to negotiate such transactions;

Or: to accept that the future of the Company is unknown and at risk of being put into the control and direction of a Board largely appointed by Mr. Anderson and without any compensation to other shareholders for the level of influence afforded to Mr. Anderson.

Your Board believes that its current strategy is the right one, and new opportunities will be identified if project vendors believe that the Company can transact. This may only occur if the majority of shareholders vote down resolutions to introduce Mr. Anderson's nominees, and vote for the other resolutions described above, thereby lifting the limitations since the prior AGM. Your Board would then act immediately to work with Mr. Anderson, to ensure that he recognises such vote, to understand his plans or projects that he may wish to introduce and to assess any changes necessary in order that his trust in the current Board and management is reinstated.

There can be no assurance that, should a majority of shareholders vote with the Board's recommendations, your Board will be able to effect the strategy and succeed in reinstating a positive working relationship with Mr. Anderson.

Furthermore, the Board believes that there can be no assurance that the Company's management, which has been integral to both maintenance of existing interests in the Spanish assets held by Ormonde and identification, assessment, negotiation and implementation of any transaction, and would be integral to an orderly winding up of the Company's interests, will remain with the Company without a clear actionable strategy for the business, or that the management team will be willing to remain involved to implement as yet unknown strategic proposals that may be proffered by Mr. Anderson.

As stated above, Mr. Timmons has recused himself from the Board's deliberations and is not participating in these recommendations.

The other directors ("Directors") believe that the proposals set out before the meeting in Resolutions 1 to 6 are in the best interests of the Company and of shareholders as a whole and, accordingly, the Directors recommend that you vote in favour of each of these resolutions at the AGM.

The Directors believe that the proposals set out in Resolutions 7 and 8 are not in the best interests of the Company and of shareholders as a whole and, accordingly, the Directors recommend that you vote against each of these resolutions at the AGM.

Yours faithfully,

Jonathan Henry

Executive Chair

Enquiries to:

Ormonde Mining plc

Jonathan Henry, Executive Chair

Paul Carroll, Chief Financial Officer

Fraser Gardiner, Chief Operating Officer

Tel: +353 (0)1 8014184

Media enquiries - Buchanan

Bobby Morse / Ariadna Peretz / James Husband

Tel: +44 (0)20 7466 5000

Email: [email protected]

Davy (Nomad, Euronext Growth Advisor and Joint Broker)

John Frain / Barry Murphy

Tel: +353 (0)1 679 6363

SP Angel Corporate Finance LLP (Joint Broker)

Ewan Leggat

Tel: +44 (0)20 3 470 0470

Note on Letter from the Chair:

Instructions on how to participate (including by appointing a proxy) in the Annual General Meeting ("AGM") of Ormonde are set out in the notes to the Notice of AGM which has been posted to all certificated shareholders and which is available to view on the Company's website at: http://ormondemining.com/investors/investor-notices/.

The Company continues to monitor the impact of COVID-19 and any relevant updates regarding the AGM, including any changes to the arrangements outlined in this letter, will also be made available in the same location on the Company's website. 

In the light of current and likely restrictions on public gatherings, you may be asked to prove full vaccination against or recovery from Covid-19 to gain attendance to the AGM and numbers of attendees may be restricted.  In the light of the foregoing and of possible measures that may be introduced as referred to above, so as to ensure that your vote is counted, we encourage all shareholders to submit proxy instructions ahead of the meeting and before the voting deadlines, detailed in the notes to the Notice of AGM, to guarantee that you can vote and be represented at the AGM whether capable of attending or not.