Silver Elephant Mining Corp 6-K, filed Feb 7, 2020
Silver Elephant Mining Corp. (SILEF)
6-K
2020-02-07
For: 2020-02-07
View Original
Added on
April 06, 2026
About this 6-K
Silver Elephant Mining Corp filed this 6-K on February 7, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER
THE
SECURITIES EXCHANGE ACT OF 1934
For the
month of February
2020
Commission
File Number 000-55985
PROPHECY DEVELOPMENT CORP.
(Translation
of registrant’s name into English)
Suite 1610 – 409 Granville Street
Vancouver, British Columbia, Canada V6C 1T2
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F
Form
20-F ☒
Form
40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1):
☐
Note: Regulation S-T Rule
101(b)(1) only permits the submission in paper of a Form 6-K if
submitted solely to provide an attached annual report to security
holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule
101(b)(7): ☐
Note: Regulation S-T
Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document
that the registrant foreign private issuer must furnish and make
public under the laws of the jurisdiction in which the registrant
is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules
of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on
EDGAR.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
|
PROPHECY
DEVELOPMENT CORP.
|
|
|
|
|
|
|
|
|
Date: February 7,
2020
|
By:
|
/s/
Brigitte
McArthur
|
|
|
|
|
Brigitte
McArthur
|
|
|
|
|
Corporate
Secretary
|
|
2
INDEX TO EXHIBITS
Notice and
Management Information Circular of Special Meeting of Shareholders
to be held on March 16, 2020.
3
Exhibit
99.1
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AND MANAGEMENT INFORMATION CIRCULAR
To be held on
Monday, March 16, 2020 at 10:00 a.m. (PST)
Dated
as at January 31, 2020
1
January
31, 2020
INVITATION TO SHAREHOLDERS
Dear Securityholders:
On
behalf of the board of directors (the “Board”), management and employees
of Prophecy Development Corp. (the “Company”), we invite you to attend
our special meeting of shareholders of the Company (the
“Meeting”) to be
held on Monday, March 16, 2020 at Suite 2600 – 1066 West
Hastings Street, Vancouver, British Columbia, Canada V6E 3X1 at
10:00 a.m. (PST).
The items of business to be considered at the Meeting are described
in the Notice of Special Meeting of Shareholders of Prophecy
Development Corp. and the accompanying management information
circular (the “Circular”). The contents and the sending of the
Circular have been approved by the Board.
We encourage you to vote, which can easily be done by following the
instructions enclosed with the accompanying Circular. Following the
formal portion of the Meeting you will have an opportunity to ask
questions.
We look forward to seeing you at the Meeting.
Yours sincerely,
PROPHECY DEVELOPMENT CORP.
/s/ “Michael Doolin”
Michael
Doolin
Interim
Chief Executive Officer
2
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the
Special Meeting of shareholders of Prophecy Development Corp. (the “Company”) will be held at Suite
2600 – 1066 West Hastings Street, Vancouver, British
Columbia, Canada V6E 3X1 on Monday,
March 16, 2020 at 10:00 a.m. (PST) (the “Meeting”), for the following
purposes:
1.
to consider and, if
deemed advisable, to pass, with or without variation, as more
particularly described in the accompanying management information
circular of the Company dated as of January 31, 2020 (the
“Circular”), a
resolution ratifying a total of 1,275,000 stock options previously
granted by the Company on July 29, 2019;
2.
to consider and, if
deemed advisable, to pass, with or without variation, as more
particularly described in the accompanying Circular, a resolution
amending the Articles of the Company
to change the name of the Company to “Silver Elephant Mining
Corp.”, or such other name as may be determined by the Board,
in its sole discretion;
3.
to consider and, if
deemed advisable, to pass, with or without variation, as more
particularly described in the accompanying Circular, a resolution
to approve a consolidation of the Company’s issued and
outstanding common shares (the “Common Shares”) on the basis of a
consolidation ratio to be selected by the Board, within the range
of one (1) post-consolidation Common Share for every five (5)
pre-consolidation Common Shares issued and outstanding, and one (1)
post-consolidation Common Share for every ten (10)
pre-consolidation Common Shares issued and outstanding or such
other lesser ratio and implemented at such time as may be
determined by the Board, in its sole discretion; and
4.
to transact such
other business as may properly come before the
Meeting.
The
specific details of the foregoing matters to be put before the
Meeting, as well as further information with respect to voting by
proxy, are set forth in the Circular.
Registered Shareholders unable to attend the Meeting in person
should read the notes to the enclosed Proxy and complete and return
the Proxy to Computershare Investor Services Inc. within the time
required by, and to the location set out in, the notes to the
Proxy.
Non-registered Shareholders whose Common Shares are registered in
the name of a “nominee” (usually a bank, trust company,
securities dealer or other financial institution), should carefully
follow the instructions provided by their nominee to ensure their
vote is counted.
The Board of the Company has by resolution fixed the close of
business on January 31, 2020 as the record date being the date for
the determination of the registered holders of Common Shares
entitled to receive notice of and to vote at the Meeting and any
adjournment thereof. The Company’s shareholders are requested
to complete and return the enclosed form of proxy to ensure that
your Common Shares will be represented at the Meeting, whether you
are personally able to attend. If you have questions, you may
contact the Company’s legal counsel at
mshams@mltaikins.com.
DATED at Vancouver, British Columbia, this 31st day of January,
2020.
By Order of the Board of Directors
/s/
“Michael
Doolin”
Michael
Doolin
Chief
Executive Officer
3
VOTING AND PROXIES: QUESTIONS AND ANSWERS
This
management information circular is dated January 31, 2020 (the
“Circular”) and
is furnished in connection with the solicitation by or on behalf of
the management of Prophecy Development Corp. (“Prophecy”, the “Company”, “our” or “we”) of proxies to be used at the
Special Meeting of shareholders of Prophecy to be held at Suite
2600 – 1066 West Hastings Street, Vancouver, British
Columbia, Canada V6E 3X1 on March 16,
2020 at 10:00 a.m. (PST) for the purposes indicated in the
Notice of Special Meeting. It is expected that solicitation of
proxies will be conducted primarily by mail, but proxies may also
be solicited personally, by telephone or facsimile or other similar
means by Prophecy, its employees or agents. Custodians and
fiduciaries will be supplied with proxy materials to forward to
beneficial owners of Common Shares of Prophecy (“Common Shares”). The record date
to determine which shareholders are entitled to receive notice of
and vote at the meeting is January 31, 2020.
Your
vote is very important to us. We encourage you to exercise your
vote using any of the voting methods described herein. To be valid,
completed proxy forms must be dated, completed, signed and
deposited with our transfer agent, Computershare Investor Services
Inc. (“Computershare”): (i) by mail using
the enclosed return envelope or one addressed to Computershare
Investor Services Inc., Proxy Department, 135 West Beaver Creek,
P.O. Box 300, Richmond Hill, Ontario, L4B 4R5; (ii) by hand
delivery to Computershare, 8th Floor, 100 University Avenue,
Toronto, Ontario, M5J 2Y1; or (iii) by facsimile to (416) 263-9524
or 1-866-249-7775. Additionally, you may vote by using the internet
at www.investorvote.com or by calling 1-866-732-VOTE (8683). Your
proxy instructions must be received in each case no later than
10:00 a.m. (PST) on March 12, 2020.
Please
read the following for commonly asked questions and answers
regarding voting and proxies:
Q.
Am
I entitled to vote?
A.
You are entitled to
vote if you are a holder of Common Shares as of the close of
business on January 31, 2020, the record date for the meeting. Each
common share is entitled to one vote. A simple majority of votes
(50% plus one vote) is required to approve all ordinary
resolutions. A special
resolution requires at least 66⅔% of the votes casts by
shareholders in favour of it in order to pass. The list of
registered shareholders maintained by Prophecy will be available
for inspection after January 31, 2020, during usual business hours
at the offices of the Company located at Suite 1610 – 409
Granville Street. Vancouver, British Columbia, Canada V6C 1T2 and
will be available at the Meeting.
Q.
What
am I voting on?
A.
You will be
voting:
●
to ratify certain
stock options previously granted by the Company;
●
to approve the name
change of the Company to “Silver Elephant Mining
Corp.”, or such other name as may be determined by the Board,
in its sole discretion;
●
to approve the
consolidation of the Company’s Common Shares on the basis of
one (1) post-consolidation Common Share for between five (5) and
ten (10) pre-Consolidation Common Shares, or such other ratio and
to be implemented at such time as may be determined by the Board,
in its sole discretion; and
●
and such other
matters as may properly come before the Meeting,
all as
more particularly described in this Circular.
Q.
What
if amendments are made to these matters or if other matters are
brought before the Meeting?
A.
If you attend the
Meeting in person and are eligible to vote, you may vote on such
matters as you choose. If you have completed and returned a proxy,
the securities represented by proxy will be voted or withheld from
voting in accordance with your instructions on any ballot that may
be called for and, if you specify a choice with respect to any
matter to be acted upon, the securities will be voted accordingly.
The persons named in the proxy form will have discretionary
authority with respect to amendments or variations to matters
identified in the Notice of Special Meeting and to other matters
that may properly come before the Meeting. As of the date of this
Circular, our management knows of no such amendment, variation or
other matter expected to come before the Meeting. If any other
matters properly come before the Meeting, the persons named in the
proxy form will vote on them in accordance with their best
judgment. The management of Prophecy is soliciting your proxy.
Solicitation of proxies is done primarily by mail, supplemented by
telephone or other contact, by our employees or agents at a nominal
cost, and all these costs are paid by Prophecy. If you are eligible
to vote and your Common Shares are registered in your name, you can
vote your Common Shares in person at the Meeting or by completing
your proxy form through any of the methods described above. If your
Common Shares are not registered in your name but are held by a
nominee, please see below.
4
Q.
How
can I vote?
A.
If you are eligible
to vote and your Common Shares are registered in your name, you can
vote your Common Shares in person at the Meeting or by completing
the proxy form through any of the methods described above. If your
Common Shares are not registered in your name but are held by a
nominee, please see below.
Q.
How
can a non-registered shareholder vote by proxy?
A.
The
following information is of significant importance to shareholders
who do not hold their Common Shares in their own name.
If your
Common Shares are not registered in your name but are held in the
name of a nominee (usually a bank, trust company, securities broker
or other financial institution), you are a “Beneficial Shareholder” and your
nominee is required to seek your instructions as to how to vote
your Common Shares. Your nominee will have provided you with a
package of information, including these meeting materials and
either a proxy or a voting form. Carefully follow the instructions
accompanying the proxy or voting form provided by your
nominee.
Beneficial Shareholders should note that the only proxies that can
be recognized and acted upon at the meeting are those deposited by
registered shareholders (those whose names appear on the records of
the Company as the registered holders of Common Shares) or as set
out in the following disclosure. If Common Shares are listed in an
account statement provided to a shareholder by a broker, then in
almost all cases those Common Shares will not be registered in the
shareholder’s name on the records of the Company. Such Common
Shares will more likely be registered under the names of the
shareholder’s broker or an agent of that broker. In the
United States, the vast majority of such Common Shares are
registered under the name of Cede & Co. as nominee for The
Depository Trust Company (which acts as depositary for many U.S.
brokerage firms and custodian banks), and in Canada, under the name
of CDS & Co. (the registration name for The Canadian Depository
for Securities Limited, which acts as nominee for many Canadian
brokerage firms). Intermediaries are required to seek voting
instructions from Beneficial Shareholders in advance of
shareholders’ meetings. Every intermediary has its own
mailing procedures and provides its own return instructions to
clients.
There are two kinds of Beneficial Shareholders – those who
object to their name being made known to the issuers of securities
which they own (called OBOs for Objecting Beneficial Owners), and
those who do not object to the issuers of the securities they own
knowing who they are (called NOBOs for Non-Objecting Beneficial
Owners).
Non-Objecting Beneficial Owners
The Company is taking utilizing the provisions of
National Instrument 54-101 – Communication with Beneficial
Owners of Securities of a Reporting Issuer (“NI 54-101”) which permit it to deliver proxy-related
materials directly to its NOBOs. As a result, NOBOs can expect to
receive a scannable Voting Instruction Form
(“VIF”) from Computershare, our transfer agent.
The VIF is to be completed and returned to Computershare in the
envelope provided or by facsimile to the number provided in the
VIF. In addition, Computershare provides both telephone voting and
internet voting as described on the VIF itself which contain
complete instructions. Computershare will tabulate the results of
the VIFs received from NOBOs and will provide appropriate
instructions at the Meeting with respect to the Common Shares
represented by the VIFs they receive.
Materials prepared by the Company to be sent to
shareholders in respect of the Meeting (“Meeting
Materials”) are being
sent to both Registered Shareholders and Beneficial Shareholders
who are NOBOs. If you are a Beneficial Shareholder, and the Company
or its agent sent these materials directly to you, your name,
address and information about your holdings of securities were
obtained in accordance with applicable securities regulatory
requirements from the intermediary holding securities on your
behalf.
By
choosing to send Meeting Materials to you directly, the Company
(and not the intermediary holding Common Shares on your behalf) has
assumed responsibility for (i) delivering these materials to you,
and (ii) executing your proper voting instructions. Please return
your VIF as specified in the request for voting instructions sent
to you.
Objecting Beneficial Owners
The
Company is utilizing the provisions of NI 54-101 that permit it to
deliver proxy-related materials indirectly through intermediaries
to its OBOs. The Company will pay these intermediaries to deliver
Meeting Materials to OBOs. Intermediaries are responsible for
delivering the Meeting Materials to OBOs unless the OBO has waived
the right to receive them. Beneficial Shareholders who are OBOs
should follow the instructions of their intermediary carefully to
ensure that their Common Shares are voted at the
Meeting.
The form of proxy supplied to you by your broker
will be similar to the Proxy provided to Registered Shareholders by
the Company. However, its purpose is limited to instructing the
intermediary on how to vote on your behalf. Most brokers now
delegate responsibility for obtaining instructions from clients to
Broadridge Financial Solutions, Inc. (“Broadridge”) in the United States and in Canada.
Broadridge mails a VIF in lieu of a proxy provided by the Company.
The VIF will name the same persons as the Company’s Proxy to
represent your Common Shares at the Meeting. You have the right to
appoint a person (who need not be a shareholder of the Company)
different from the persons designated in the VIF, to represent your
Common Shares at the Meeting, and that person may be
you.
5
To
exercise this right, insert the name of the desired representative
(which may be you) in the blank space provided in the VIF. The
completed VIF must then be returned to Broadridge by mail or
facsimile or given to Broadridge by phone or over the internet, in
accordance with Broadridge’s instructions. Broadridge then
tabulates the results of all instructions received and provides
appropriate instructions respecting the voting of Common Shares to
be represented at the Meeting and the appointment of any
shareholder’s representative. If you receive a VIF from
Broadridge, it must be completed and returned to Broadridge in
accordance with Broadridge’s instructions, well in advance of
the Meeting in order to: (a) have your Common Shares voted as you
instruct; or (b) have any alternate representative you may choose
duly appointed to attend the Meeting and vote your Common
Shares.
Alternatively,
you can request in writing that your broker send you a proxy which
would enable you, or a person designated by you, to attend the
Meeting and vote your Common Shares.
Q.
How
can a non-registered shareholder vote in person at the
Meeting?
A.
Prophecy does not
have access to all the names of its non-registered shareholders.
Therefore, if you are a non-registered shareholder and attend the
Meeting, we will have no record of your shareholdings or of your
entitlement to vote unless your nominee has appointed you as a
proxyholder. If you wish to vote in person at the Meeting, insert
your name in the space provided on the proxy form or voting form
sent to you by your nominee. In doing so you are instructing your
nominee to appoint you as a proxyholder. Complete the form by
following the return instructions provided by your nominee. You
should report to a representative of Computershare upon arrival at
the meeting.
Q.
Who
votes my Common Shares and how will they be voted if I return a
proxy?
A.
By properly
completing and returning a proxy, you are authorizing the person
named in the proxy to attend the Meeting and vote your Common
Shares. You can use the enclosed proxy form, or any other proper
form of proxy, to appoint your proxyholder. The Common Shares
represented by your proxy must be voted according to your
instructions in the proxy. If you properly complete and return your
proxy but do not specify how you wish the votes cast, your Common
Shares will be voted as your proxyholder sees fit. Unless contrary
instructions are provided, Common Shares represented by proxies
received by management will be voted:
●
FOR the
ratification of the stock options previously granted by the Company
on July 29, 2019;
●
FOR the approval to
change the name of the Company to “Silver Elephant Mining
Corp.”; and
●
FOR the approval of
the consolidation of Company’s Common Shares,
all as more
particularly described in this Circular.
In
respect of a matter for which a choice is not specified in the
Proxy, the persons named in the Proxy will vote the Common Shares
represented by the Proxy FOR the approval of such matter.
Management is not currently aware of any other matter that could
come before the Meeting.
Q.
Can
I appoint someone other than the individuals named in the enclosed
proxy form to vote my Common Shares?
A.
Yes, you have the
right to appoint the person of your choice, who does not need to be
a shareholder, to attend and act on your behalf at the
Meeting. If you wish to
appoint a person other than the names that appear, then strike out
those printed names appearing on the proxy form and insert the name
of your chosen proxyholder in the space provided.
It is
important to ensure that any other person you appoint is attending
the meeting and is aware that his or her appointment to vote your
Common Shares has been made. Proxyholders should, upon arrival at
the meeting, present themselves to a representative of
Computershare.
Q.
What Information do I have as a U.S. Shareholder?
A.
The solicitation of proxies and the transactions
contemplated in this Circular
involve securities of an issuer located in Canada and are being
effected in accordance with the corporate laws of the Province of
British Columbia, Canada and securities laws of Canada applicable
to the Company. The proxy solicitation rules under the United
States Securities Exchange Act
of 1934, as amended, are not
applicable to the Company or this solicitation, and this
solicitation has been prepared in accordance with the disclosure
requirements of the securities laws of the provinces of Canada.
Shareholders should be aware that disclosure requirements under the
securities laws of Canada differ from the disclosure requirements
under United States securities laws.
The enforcement by shareholders of civil
liabilities under United States federal securities laws may be
affected adversely by the fact that the Company is incorporated
under the Business Corporations
Act (British Columbia) (the
“BCBCA”), as amended, certain of its directors and
its executive officers are residents of Canada, and its assets and
the assets of such persons are located outside the United States.
Shareholders may not be able to sue a foreign company or its
officers or directors in a foreign court for violations of United
States federal securities laws. It may be difficult to compel a
foreign company and its officers and directors to subject
themselves to a judgment made by a United States
court.
6
Q.
What
if my Common Shares are registered in more than one name or in the
name of my company?
A.
If the Common
Shares are registered in more than one name, all those registered
must sign the form of proxy. If the Common Shares are registered in
the name of your company or any name other than yours, you should
submit documentation that proves you are authorized to sign the
proxy form, concurrently with the filing of your
proxy.
Q.
Can
I revoke a proxy or voting instruction?
A.
If you are a
registered shareholder and have returned a proxy, you may revoke it
by:
1.
completing and
signing a proxy bearing a later date, and delivering it to
Computershare; or
2.
delivering a
written statement revoking your proxy, signed by you or your
authorized attorney to:
(a)
Prophecy’s
legal counsel located at Suite 2600 – 1066 West Hastings
Street, Vancouver, British Columbia, Canada V6E 3X1 at any time up
to and including the two (2) business days prior to the Meeting, or
the date that is two (2) business days preceding the day to which
the Meeting is adjourned; or
(b)
to the Chairman of
the Meeting prior to the start of the Meeting.
If you
are a non-registered shareholder, contact your
nominee.
Q.
Is
my vote confidential?
A.
Your proxy vote is
confidential. Proxies are received, counted and tabulated by our
transfer agent, Computershare. Computershare does not disclose the
results of individual shareholder votes unless: they contain a
written comment clearly intended for management; in the event of a
proxy contest or proxy validation issue; or if necessary, to meet
legal requirements. Proxy voting records are routinely shared with
management and counsel in the days prior to the
meeting.
Q.
How
many Common Shares are outstanding?
A.
As of January 31,
2020, there were 122,900,508
Common Shares outstanding. Prophecy has no other class or series of
voting shares outstanding.
Q.
What
is electronic delivery?
A.
Electronic delivery
is voluntary e-mail notification sent to shareholders when
documents such as our annual report, quarterly reports and this
Circular are available on our web site. If you wish, you may elect
to be notified by e-mail when documentation is posted on our web
site. Electronic delivery will save paper, reduce our impact on the
environment and reduce costs.
Q. How can I ask for electronic delivery?
A.
If you are a
registered shareholder, go to the Investor Communication web site
at www.InvestorDelivery.com and follow the instructions on the
screen.
You
will need your Control Number and your PIN number (you will find
them on the proxy form provided in your package).
Non-registered
holders can sign up for mailings (not proxy materials) through
www.computershare.com/mailinglist.
If you
have a question regarding the Meeting, please contact Computershare
at 1-800-564-6253 or visit www.computershare.com.
Q. What if I have other questions?
A.
If you have a
question regarding the meeting, please contact Computershare at
1-800-564-6253 or visit www.computershare.com.
7
INFORMATION CIRCULAR
(all information as at January 31, 2020 unless otherwise
noted)
INFORMATION CONTAINED IN THIS INFORMATION CIRCULAR
No person has been authorized to give any information or to make
any representation in connection with the matters being considered
herein other than those contained in this management information
circular (the “Circular”) and, if given or made, such information
or representation should be considered or relied upon as not having
been authorized. This Circular does not constitute an offer to
sell, or a solicitation of an offer to acquire, any securities, or
the solicitation of a proxy, by any person in any jurisdiction in
which such an offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such an offer of
proxy solicitation. Neither the delivery of this Circular nor any
distribution of securities referred to herein shall, under any
circumstances, create any implication that there has been no change
in the information set forth herein since the date of this
Circular.
Information contained in this Circular should not be construed as
legal, tax or financial advice and Prophecy Development Corp.
(“Prophecy” or the “Company”) shareholders are urged to consult their
own professional advisors in connection with the matters considered
in this Circular.
THE MEETING
This
Circular is furnished in connection with the solicitation of
proxies by the management of the Company for use at the Special
Meeting (the “Meeting”) of its shareholders (the
“Shareholders”)
to be held on March 16, 2020 at 10:00 a.m. (PST) for the purposes
set forth in the accompanying Notice of the Meeting. In this
Circular, references to “the Company”, “we”
and “our” refer to Prophecy Development Corp., and
“Common Shares” means the common shares without par
value in the capital of the Company.
The
Company is utilizing the notice-and-access mechanism (the
“Notice-and-Access
Provisions”), that came into effect February 11, 2013
for meetings held on or after March 1, 2013, under National
Instrument 54-101 – Communication with Beneficial Owners of Securities of a
Reporting Issuer
(“NI 54-101”)
and National Instrument 51-102 – Continuous Disclosure Obligations
(“NI 51-102”)
for distribution of this Circular to non-Registered Shareholders
(as defined below) of the Company. See Completion and Proxy Instructions –
Notice-and-Access for further information.
The Record Date
Securityholders
of record at the close of business (Vancouver time) on Friday,
January 31, 2020 will be entitled to receive notice of and vote at
the Meeting, or any adjournment or postponement
thereof.
GENERAL PROXY INFORMATION
The
persons named in the accompanying form of proxy are directors and
officers of the Company. You have the right to appoint some other
person or company of your choice, who need not be a Shareholder, to
attend and act on your behalf at the Meeting.
A Shareholder desiring to appoint some other person or company to
represent him or her at the Meeting may do so either by inserting
the name of such person or company in the blank space provided in
the accompanying form of proxy and striking out the names of the
management nominees or by duly completing another proper
form of proxy and, in either case, depositing the completed
proxy at the offices of the Company’s registrar and transfer
agent, Computershare Investor Services Inc. (“Computershare”): (i) by mail using
the enclosed return envelope or one addressed to Computershare
Investor Services Inc., Attention: Proxy Department, 100 University
Ave., 8th Floor, North Tower, Toronto, Ontario, Canada, M5J 2Y1;
(ii) by hand delivery to Computershare, 8th Floor, 100 University
Avenue, Toronto, Ontario, M5J 2Y1; or (iii) by facsimile to (416)
263-9524 or 1-866-249-7775. Additionally, you may vote by using the
internet at www.investorvote.com or by calling 1-866-732-VOTE
(8683). Your proxy instructions must be received in each case no
later than 10:00 a.m. (PST) on March 12, 2020.
8
EXERCISE OF DISCRETION
The persons named in the enclosed form of proxy will vote the
Common Shares in respect of which they are appointed in accordance
with the direction of the Shareholders appointing them.
In the absence of
such direction, such Common Shares will be voted in the discretion
of the person named in the proxy. The enclosed form of proxy
confers discretionary authority upon the persons named therein with
respect to amendments or variations to matters identified in the
Notice of Meeting and with respect to other matters which may
properly come before the Meeting. At the time of printing of this Circular,
management knows of no such amendments, variations or other matters
to come before the Meeting. However, if any other matters which are
not now known to management should properly come before the
Meeting, the proxy will be voted on such matters in accordance with
the best judgment of the named proxies.
Persons Making the Solicitation
Prophecy’s management is using this Circular to solicit
proxies from Shareholders for use at the Meeting.
The solicitation of proxies will be
primarily by mail, but Prophecy’s directors, officers and
regular employees may also solicit proxies personally or by telephone. Prophecy will bear all costs of the
solicitation. Prophecy has arranged for Intermediaries to forward
the Meeting materials to
beneficial owners of Common
Shares held of record by those Intermediaries and Prophecy may
reimburse the Intermediaries for their reasonable fees and
disbursements in that regard.
COMPLETION AND PROXY INSTRUCTIONS
Voting of Proxies
The
Common Shares represented by the accompanying form of proxy (if the
same is properly executed in favour of the management nominees), is
received at the offices of the Company’s transfer agent,
Computershare Investor Services Inc. (“Computershare”): (i) by mail using
the enclosed return envelope or one addressed to Computershare
Investor Services Inc., Attention: Proxy Department, 100 University
Ave., 8th Floor, North Tower, Toronto, Ontario, Canada, M5J 2Y1;
(ii) by hand delivery to Computershare, 8th Floor, 100 University
Avenue, Toronto, Ontario, M5J 2Y1; or (iii) by facsimile to (416)
263-9524 or 1-866-249-7775. Additionally, you may vote by using the
internet at www.investorvote.com or by calling 1-866-732-VOTE
(8683), by no later than 10:00 a.m. (PST) on March 12, 2020 or, if
the Meeting is adjourned, then not less than 48 hours (excluding
Saturdays, Sundays and holidays) before any such adjourned Meeting,
will be voted at the Meeting, and, where a choice is specified in
respect of any matter to be acted upon, will be voted or withheld
from voting in accordance with the specification made. In the absence of such a specification, the
person designated in the accompanying form of proxy will
vote in the
discretion of the person named in the proxy.
The
accompanying form of proxy confers discretionary authority upon the
persons named therein with respect to amendments or variations to
the matters set forth in the accompanying notice of Meeting, or all
other business or matters that may properly come before the
Meeting. At the date hereof, management of the Company knows of no
such amendments, variations or other business or matters to come
before the Meeting.
Appointment of Proxyholders
The
individuals named in the accompanying form of proxy (the
“Proxy”) are
directors or officers of the Company. If you are a shareholder
entitled to vote at the Meeting, you have the right to appoint a
person or company other than either of the persons designated in
the Proxy, who need not be a shareholder, to attend and act for you
and on your behalf at the Meeting. You may do so either by
inserting the name of that other person in the blank space provided
in the Proxy or by completing and delivering another suitable form
of proxy. If your Common Shares are held in physical (i.e. paper)
form and actually registered in your name, then you are a
registered shareholder (“Registered Shareholder”). However,
if like most shareholders you keep your Common Shares in a
brokerage account, then you are a beneficial shareholder
(“Beneficial
Shareholder”). The manner for voting is different for
Registered Shareholders and Beneficial Shareholders and you need to
carefully read the instructions below. “Beneficial
Shareholders” means shareholders who do not hold Common
Shares in their own name and “intermediaries” refers to
brokers, investment firms, clearing houses and similar entities
that own securities on behalf of Beneficial
Shareholders.
Registered Holders
Only
Shareholders registered as
shareholders in the Company’s shareholder registry
maintained by the Company’s registrar and transfer
agent or duly appointed Proxyholders (except as discussed below
under “Non-Registered
Shareholders”) will be recognized to make motions or vote at
the Meeting.
Registered
Shareholders may wish to vote by proxy whether or not they are able
to attend the Meeting in person. Registered Shareholders electing
to submit a proxy may do so by:
(a)
by mail using the
enclosed return envelope or one addressed to Computershare Investor
Services Inc., Attention: Proxy Department, 100 University Ave.,
8th Floor, North Tower, Toronto, Ontario, Canada, M5J
2Y1;
9
(b)
by hand delivery to
Computershare, 8th Floor, 100 University Avenue, Toronto, Ontario,
M5J 2Y1;
(c)
by facsimile to
(416) 263-9524 or 1-866-249-7775. Additionally, you may vote by
using the internet at www.investorvote.com or by calling
1-866-732-VOTE (8683). Your proxy instructions must be received in
each case no later than 10:00 a.m. (PST) on March 12,
2020;
(d)
using a touch-tone
phone to transmit voting choices to a toll-free number. Registered
Shareholders must follow the instructions of the voice response
system and refer to the enclosed Proxy for the toll-free number,
the holder’s account number and the proxy access number;
or
(e)
using the internet
through the website of the Company’s transfer agent at
www.computershare.com/ca/proxy. Registered Shareholders must follow
the instructions that appear on the screen and refer to the
enclosed Proxy for the holder’s account number and the Proxy
access number.
In all
cases ensuring that the Proxy must be received by no later than
10:00 AM (PST) on March 12, 2020 or at least 48 hours (excluding
Saturdays, Sundays and holidays) before any adjournment of the
Meeting at which the Proxy is to be used.
Non-Registered Shareholders
The following information is of significant importance to
shareholders who do not hold their Common Shares in their own
name. Beneficial Shareholders should note that the only
proxies that can be recognized and acted upon at the Meeting are
those deposited by Registered Shareholders (those whose names
appear on the records of the Company as the registered holders of
Common Shares) or as set out in the following
disclosure.
If
Common Shares are listed in an account statement provided to a
shareholder by a broker, then in almost all cases those Common
Shares will not be registered in the shareholder’s name on
the records of the Company. Such Common Shares will more likely be
registered under the names of the shareholder’s broker or an
agent of that broker. In the United States, the vast majority of
such Common Shares are registered under the name of Cede & Co.
as nominee for The Depository Trust Company (which acts as
depositary for many U.S. brokerage firms and custodian banks), and
in Canada, under the name of CDS & Co. (the registration name
for The Canadian Depository for Securities Limited, which acts as
nominee for many Canadian brokerage firms).
Intermediaries
are required to seek voting instructions from Beneficial
Shareholders in advance of shareholders’ meetings. Every
intermediary has its own mailing procedures and provides its own
return instructions to clients.
There
are two kinds of beneficial owners – those who object to
their name being made known to the issuers of securities which they
own (called OBOs for objecting beneficial owners), and those who do
not object to the issuers of the securities they own knowing who
they are (called NOBOs for non-objecting beneficial
owners).
The
Company is taking advantage of the provisions of NI 54-101 that
permit it to deliver proxy-related materials directly to its NOBOs.
As a result, NOBOs can expect to receive a scannable Voting
Information Form (“VIF”) from Computershare, our
transfer agent. The VIF is to be completed and returned to
Computershare in the envelope provided or by facsimile to the
number provided in the VIF. In addition, Computershare provides
both telephone voting and internet voting as described on the VIF
itself which contain complete instructions. Computershare will
tabulate the results of the VIFs received from NOBOs and will
provide appropriate instructions at the Meeting with respect to the
shares represented by the VIFs they receive.
The
Meeting materials are being sent to Beneficial Shareholders who are
NOBOs. If you are a Beneficial Shareholder, and the Company or its
agent sent these materials directly to you, your name, address and
information about your holdings of securities were obtained in
accordance with applicable securities regulatory requirements from
the intermediary holding securities on your behalf. By choosing to
send the Meeting materials to you directly, the Company (and not
the intermediary holding Common Shares on your behalf) has assumed
responsibility for (i) delivering these materials to you, and (ii)
executing your proper voting instructions. Please return your VIF
as specified in the request for voting instructions sent to
you.
The
Company is taking advantage of the provisions of NI 54-101 that
permit it to deliver proxy-related materials indirectly through
intermediaries to its OBOs. The Company will pay these
intermediaries to deliver Meeting materials to OBOs. Intermediaries
are responsible for delivering the Meeting materials to OBOs unless
the OBO has waived the right to receive them. Beneficial
Shareholders, who are OBOs, should follow the instructions of their
intermediary carefully to ensure that their Common Shares are voted
at the Meeting.
The
Proxy supplied to you by your broker will be similar to the Proxy
provided to Registered Shareholders by the Company. However, its
purpose is limited to instructing the intermediary on how to vote
on your behalf. Most brokers now delegate responsibility for
obtaining instructions from clients to Broadridge Financial
Solutions, Inc. (“Broadridge”) in the United States
and in Canada. Broadridge mails a VIF in lieu of a Proxy provided
by the Company. The VIF will name the same persons as the
Company’s Proxy to represent your Common Shares at the
Meeting. You have the right to appoint a person (who need not be a
shareholder of the Company) different from the persons designated
in the VIF, to represent your Common Shares at the Meeting, and
that person may be you. To exercise this right, insert the name of
the desired representative (which may be you) in the blank space
provided in the VIF.
10
The
completed VIF must then be returned to Broadridge by mail or
facsimile or given to Broadridge by phone or over the internet, in
accordance with Broadridge’s instructions. Broadridge then
tabulates the results of all instructions received and provides
appropriate instructions respecting the voting of Common Shares to
be represented at the Meeting and the appointment of any
shareholder’s representative. If you receive a VIF from Broadridge, it must
be completed and returned to Broadridge in accordance with
Broadridge’s instructions, well in advance of the Meeting in
order to: (a) have your Common Shares voted as you instruct; or (b)
have any alternate representative you may choose duly appointed to
attend the Meeting and vote your Common Shares.
Alternatively,
you can request in writing that your broker send you a Proxy which
would enable you, or a person designated by you, to attend the
Meeting and vote your Common Shares.
Shareholders
with questions respecting the voting of shares held through a
stockbroker or other financial intermediary should contact that
stockbroker or other intermediary for assistance.
Notice to Shareholders in the United States
The
solicitation of proxies and the transactions contemplated in this
Information Circular involve securities of an issuer located in
Canada and are being effected in accordance with the corporate laws
of the Province of British Columbia, Canada and securities laws of
the provinces of Canada. The proxy solicitation rules under the
United States Securities Exchange
Act of 1934, as amended, are not applicable to the Company
or this solicitation, and this solicitation has been prepared in
accordance with the disclosure requirements of the securities laws
of the provinces of Canada. Shareholders should be aware that
disclosure requirements under the securities laws of the provinces
of Canada differ from the disclosure requirements under United
States securities laws.
The
enforcement by shareholders of civil liabilities under United
States federal securities laws may be affected adversely by the
fact that the Company is amalgamated under the Business Corporations Act (British
Columbia) (the “BCBCA”), as amended, certain of
its directors and its executive officers are residents of Canada
and its assets and the assets of such persons are located outside
the United States. Shareholders may not be able to sue a foreign
company or its officers or directors in a foreign court for
violations of United States federal securities laws. It may be
difficult to compel a foreign company and its officers and
directors to subject themselves to a judgment made by a United
States court.
Notice-and-Access
As
noted above, the Company is utilizing Notice-and-Access Provisions
that came into effect on February 11, 2013 under NI 54-101 and NI
51-102 for distribution of this Circular to non-Registered
Shareholders.
The
Notice-and-Access Provisions are a set of rules that allow
reporting issuers to post electronic versions of proxy-related
materials (such as proxy circulars and annual financial statements)
on-line, via the System for Electronic Document Analysis and
Retrieval (“SEDAR”) and at least one other
website, rather than mailing paper copies of such materials to
non-Registered Shareholders. Electronic copies of this Circular and
proxy related materials may be found under the Company’s
SEDAR profile at www.SEDAR.com and on the
Company’s website at www.prophecydev.com under
“Investor – Shareholder Meetings – 2020 Special
Meeting”.
The
Company will not use procedures known as
“stratification” in relation to the use of
Notice-and-Access Provisions. Stratification occurs when a
reporting issuer using the Notice-and-Access Provisions provides a
paper copy of this Circular to some shareholders with the notice
package.
In
relation to the Meeting, non-Registered Shareholders will receive
the required documentation under the Notice-and-Access Provisions,
which will not include a paper copy of this Circular. Shareholders
are reminded to review this Circular.
Revocation of Proxies
In addition to revocation in any other manner permitted by law, a Registered Shareholder who has given a proxy may revoke it:
1.
by attending the Meeting and voting the Registered Shareholder’s Common
Shares;
2.
by fully executing
another form of proxy bearing a later date and duly depositing the
same before the specified time; or
3.
by
executing a valid notice of revocation (where a new proxy is not
also filed).
A Registered Shareholder means
a Shareholder of the Company in possession of a physical Common
Shares certificate of the Company as recorded with the
Transfer Agent.
A later dated proxy or notice of revocation must be executed
by the Registered Shareholder
or the Registered Shareholder’s authorized attorney in writing, or, if the Registered Shareholder is a corporation, under its corporate seal by an
officer or attorney duly authorized,
and delivered by fax at 1-866-249-7775 (toll free in Canada
and the United States) or 416-263-9524 (outside of Canada and the
United States), or by mail (via
postage paid return envelope) at Computershare Investor Services
Inc., Attention: Proxy Department, 100 University Ave., 8th
Floor, North Tower, Toronto, Ontario, Canada, M5J 2Y1 or to the head office of the Company located
at Suite 1610 - 409 Granville Street, Vancouver, British
Columbia, V6C 1T2, Canada.
11
A later dated proxy must be received before 10:00 a.m. (PST) on
March 12, 2020, or if the Meeting is adjourned, the day that is two
business days before any reconvening thereof at which the Proxy is
to be used, or to the chair of the Meeting on the day of the
Meeting or any reconvening thereof,
or in any other provided by
law. Only Registered
Shareholders have the right to revoke
a proxy. Beneficial Shareholders who wish to change their vote
must, in sufficient time in advance of the Meeting, arrange for
their Intermediaries to change the vote and, if necessary, revoke
their proxy. A revocation of
proxy will not affect a matter on which a vote is taken before the
revocation.
INTERESTS OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED
UPON
Other than as set out herein, no director or executive officer of
the Company, or any person who has held such a position since the
beginning of the last completed financial year of the Company, nor
any associate or affiliate of the foregoing persons, has any
substantial or material interest, direct or indirect, by way of
beneficial ownership of securities or otherwise, in any matter to
be acted on at the Meeting other than the election of
directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING
SECURITIES
Record Date
The Record Date for determining persons entitled to receive notice
of and vote at the Meeting is January 31, 2020. Only persons who
were Registered Shareholders as of the close of business on January
31, 2020 are entitled to vote at the Meeting, or any adjournment or
postponement thereof, in the manner and subject to the procedures
described in this Circular. A quorum for the Meeting shall
be two persons present in person, each being a shareholder entitled
to vote or appointed by proxy and holding together or representing
by proxy not less than 5% of the outstanding shares of the Company
entitled to vote at a meeting.
Outstanding Shares
The
Company’s authorized
capital consists of an unlimited number of common shares without
par value. As at the date hereof, the Company has issued and outstanding
122,900,508 fully paid and
non-assessable Common Shares. Each Common Share carrying the right
to one vote. No group of Shareholders has the right to elect a
specified number of directors, nor are there cumulative or similar
voting rights attached to the Common Shares. The Company has no other classes of voting
securities and does not have any classes of restricted securities.
The outstanding Common Shares are listed on the Toronto Stock
Exchange (the “TSX”) under the symbol
“PCY”.
To the knowledge of the directors and executive officers of the Company, the only persons who, or
corporations which, beneficially own, or control or direct,
directly or indirectly, shares carrying 10% or more of the voting
rights attached to all outstanding shares of the Company are:
|
Name
|
Number of Common Shares Beneficially Owned,
Controlled or Directed (2)
|
Percentage of Outstanding Common Shares
|
|
John
Lee (1)
|
14,648,901
|
11.9%
|
Notes:
(1)
John Lee is the
Executive Chairman and a Director of the Company. Of the 14,648,901
a total of 284,310 common shares are held by Merit Holdings Ltd., a
private company wholly owned and controlled by Mr.
Lee.
(2)
Information
supplied by the beneficial holder.
VOTES NECESSARY TO PASS RESOLUTIONS
Ordinary Resolution
A
simple majority (50%+1) of affirmative votes cast at the Meeting is
required to pass the ordinary resolutions described
herein.
BUSINESS OF THE MEETING
A.
RATIFICATION OF STOCK OPTIONS GRANTS
On
July 29, 2019 the Company granted a total of 1,275,000 incentive
stock options (the "New
Options") to replace 794,000 incentive stock options (the
“Original
Options”) previously granted to certain individuals
noted in the below table (the “Grantees”) pursuant to the
Share-Based Compensation Plan of the Company as approved by the
Shareholders on June 2, 2016 and amended June 13, 2017 and
September 12, 2019 (the “Plan”). The effect of the grant of
the New Options was the reduction of the exercise price and an
extension of the expiry date of the Original Options (the
"Amendments") and the grant
of an additional total of 481,000 stock options to the same
individuals at a different exercise price and expiry date (the
“Additional
Options”, together with the Amendments, the
“Option
Grants”).
In failing to specifically notify the TSX of the Amendments and
completing them without pre-clearance by the TSX and without prior
shareholder approval, the Company contravened Subsections 613(f)
and 613(i) of the TSX Company Manual. In accordance with section
613(i) of the Toronto Stock Exchange (“TSX”) Company Manual, the TSX
requires that the Option Grants be approved by the Disinterested
Shareholders of the Company at a meeting of
Shareholders.
12
The
following table provides a summary of the Amendments:
|
Optionee
|
Number of Original Options
|
Number of New Options
|
Deemed Date of Option Grants
|
Exercise Price of Original Options
|
Exercise Price of New Options
|
Expiry Date of Original Options
|
Expiry Date of Options
|
|
Greg
Hall (1)
|
80,000
|
120,000
|
July
29, 2019
|
$0.50
|
$0.20
|
April
7, 2020 and June 22, 2020
|
July
29, 2024
|
|
Gustavo
Miranda (2)
|
35,000
|
35,000
|
July
29, 2019
|
$0.50
|
$0.20
|
April
7, 2020 and June 22, 2020
|
July
29, 2024
|
|
Irina
Plavutska (3)
|
50,000
|
100,000
|
July
29, 2019
|
$0.50
|
$0.20
|
April
7, 2020 and June 22, 2020
|
July
29, 2024
|
|
John
Lee (4)
|
369,000
|
700,000
|
July
29, 2019
|
$0.50
|
$0.20
|
April
7, 2020 and June 22, 2020
|
July
29, 2024
|
|
Nargil
Molor (5)
|
10,000
|
20,000
|
July
29, 2019
|
$0.50
|
$0.20
|
June
22, 2020
|
July
29, 2024
|
|
Ronald
Espell (6)
|
200,000
|
200,000
|
July
29, 2019
|
$0.65
|
$0.20
|
November
14, 2023
|
July
29, 2024
|
|
Sophir
Asia Ltd. (7)
|
50,000
|
100,000
|
July
29, 2019
|
$0.50
|
$0.20
|
April
7, 2020 and June 22, 2020
|
July
29, 2024
|
|
Total
|
794,000
|
1,275,000
|
|
|
|
|
|
Notes:
1)
Greg Hall is a
Director of the Company and the chair of the Company’s audit
committee and corporate governance and compensation committee. Mr.
Hall holds 238,092 common shares of the Company as at the date of
this Circular.
2)
Gustavo Miranda is
the Country Manager, Bolivia of the Company. Mr. Miranda holds
43,750 common shares of the Company as at the date of this
Circular.
3)
Irina Plavutska is
the Chief Financial Officer of the Company. Ms. Plavutska holds
100,000 common shares of the Company as at the date of this
Circular.
4)
John Lee is the
Executive Chairman and a Director of the Company. As of the date of
this Circular, Mr. Lee also holds an aggregate of
14,648,901 representing
approximately 11.9% of the issued and outstanding common shares of
the Company. Of the 14,648,901 a total of 284,310 common shares are
held by Merit Holdings Ltd., a private company wholly owned and
controlled by Mr. Lee.
5)
Nargil Molor is a
Director of Redhill Mongolia LLC., a subsidiary of the Company. Ms.
Molor does not hold any common shares of the Company as of the date
of this Circular.
6)
Ron Espell is the
Vice President, Environment and Sustainability of the Company. Mr.
Espell holds 150,000 common shares of the Company as at the date of
this Circular.
7)
Sophir Asia Ltd. is
controlled by Masa Igata, a Director of the Company and a member of
the Company’s audit committee and the corporate governance
and compensation committee. Sophir Asia Ltd. holds 1,138,928 common
shares of the Company as at the date of this Circular.
8)
The number of
common shares beneficially owned, controlled or directed, directly
or indirectly, by the above Optionees or Grantees is based on
information from the insider reports available at www.sedi.ca.
9)
1/8th (12.5%) of New
Options shall vest each quarter with the first tranche vesting on
the date that is 3 months after the date of grant.
Additional
information regarding the Plan is available in the Company’s
information circular dated July 25, 2019, a copy of which is
available under the Company’s profile on SEDAR at
www.sedar.com.
In order for the Option Grants resolutions to pass, the resolution
must be approved by a majority of the votes cast by the holders of
Common Shares, excluding Common Shares held by the Grantees, in
person or represented by proxy at the Meeting (“Disinterested
Shareholders”). As of the date hereof, the Grantees hold an
aggregate of 16,319,671, representing
approximately 13.3% of the issued and outstanding common shares of
the Company.
At the
Meeting, Disinterested Shareholders will be asked to consider
and, if thought advisable, pass, with or without
variation, an ordinary
resolution approving the
ratification of 1,275,000 stock options previously granted by the
Company on July 29, 2019.
At the
Meeting, Disinterested Shareholders will be asked to vote on the
following ordinary resolution,
with or without variation:
“BE IT RESOLVED, as an ordinary resolution of
the shareholders of the Company, THAT:
1.
the 1,275,000 stock
options granted by the Company on July 29, 2019 (as described in
the Information Circular), and the issuance of Common Shares of the
Company upon any exercise thereof by option holders in accordance
with the terms of such stock options, be and are hereby ratified,
authorized and approved; and
2.
any one or more
directors or officers of the Company, for and on behalf of the
Company, is authorized and directed, to take all necessary steps
and proceedings, and to execute, deliver and file any and all
applications, declarations, documents and other instruments and do
all such other acts or things that may be necessary or desirable to
give effect to the provisions of this
resolution.”
13
Recommendation of Management of the Company
Management
of the Company recommends that the Shareholders of the Company vote
IN FAVOUR of the Amendments. In the absence of instructions to the
contrary, the Company’s proxyholders will vote the Common
Shares represented by each form of proxy, properly executed, FOR
approving the Amendments.
A.
APPROVAL OF NAME CHANGE
At the
Meeting, Shareholders will be asked to consider and if thought
advisable, approve an ordinary
resolution authorizing the Company to amend the Company’s
Articles to change the name of the Company from “Prophecy
Development Corp.” to “Silver Elephant Mining
Corp.”, or such other name as
may be determined by the Board, in its sole discretion (the
“Name Change”).
Management of the Company believes that it is an appropriate time
for the Company to change its name to
best reflect the Company’s focus in developing its Pulacayo
silver project in Bolivia.
The
proposed Name Change is also subject to certain regulatory
approvals, including the approval of the TSX. The Board may, in its
sole discretion, determine not to implement the Name Change
resolution at any time after the Meeting and after receipt of
necessary regulatory approvals, but prior to the issuance of a
Certificate of Change of Name, without further notice to or action
on the part of the shareholders. Subject to the exercise of such
discretion by the Board, the Company will file a Form 11 –
Notice of Alteration in the prescribed form with the Registrar of
Companies under the BCBCA. The Name Change will become effective on
the date shown on the Certificate of Change of Name issued by the
Registrar of Companies under the BCBCA.
Should
the Name Change become effective, any outstanding and existing
share certificates representing Common Shares in the capital of the
Company and bearing the name “Prophecy Development
Corp.” will continue to be recognized by the Company as
validly issued and eligible for trading on the public or private
market. Shareholders who wish to have new share certificates issued
to them in the new name of the Company after the Name Change
becomes effective, may arrange directly with Computershare at their
own cost, to have such new share certificates issued to
them.
At the
Meeting, shareholders will be asked to vote on the following
ordinary resolution, with or without variation:
“BE IT RESOLVED, as an ordinary resolution of
the shareholders of the Company, THAT:
(1)
Prophecy
Development Corp. be and is hereby authorized, subject to any
necessary regulatory approvals, to amend the Company’s
Articles to change the name of the Company from “Prophecy
Development Corp.” to “Silver Elephant Mining
Corp.”, or such other name that the Board of Directors, in
its sole discretion determines, as more particularly described in
the Company’s Information Circular dated January 31,
2020;
(2)
notwithstanding
that this resolution has been duly passed by the shareholders, the
Board of Directors be, and hereby is, authorized and empowered to
revoke this resolution at any time prior to the amendment of the
Company’s Articles and to determine not to proceed with
changing the name of the Company; and
(3)
any one director or
officer of the Company is hereby authorized and empowered to
execute or cause to be executed, whether under seal of the Company
or otherwise and to deliver or cause to be delivered, all such
documents and instruments and to do or cause to be done all such
other acts and things as such director or officer may determine to
be necessary or desirable in order to carry out the intent of this
resolution, such determination to be conclusively evidenced by the
execution and delivery of such documents and other instruments or
the doing of any such act or thing.”
Recommendation of Management of the Company
Management
of the Company recommends that you vote IN FAVOUR of the Name
Change resolution. In the absence of instructions to the contrary,
the Company’s proxyholders will vote the Common Shares
represented by each form of proxy, properly executed, FOR approving
the change of Company name.
B.
APPROVAL OF CONSOLIDATION
As at
January 31, 2020, the Record Date, the Company had 122,900,508 Common Shares issued and
outstanding. The Company proposes to consolidate its Common Shares
at a ratio
between one (1) post-consolidation Common Share for every five (5)
to ten (10) pre-consolidation Common Shares, or such other
lesser consolidation ratio and to be implemented as may be
determined by the Board and approved by the Toronto Stock Exchange
(the “TSX”) of
the share consolidation (the “Consolidation”).
The effective date of the Consolidation, if approved, will be
determined by the Board when it is deemed to be in the best
interests of the Company to implement. The proposed Consolidation is subject to certain
regulatory approvals, including the approval of the
TSX.
14
No
fractional Common Shares will be issued as a result of the
Consolidation. Where the Consolidation results in a fractional
post-consolidation Common Share, the number of post-consolidation
Common Shares issued to Shareholders will be rounded down to the
nearest whole post-consolidation Common Share. No cash
consideration will be paid in respect of any fractional
post-consolidation Common Shares that are rounded down. In
addition, the exercise price and number of Common Shares of the
Company issuable upon the exercise of any outstanding stock options
or warrants will be proportionately adjusted to reflect the
Consolidation.
The
Consolidation is subject to Shareholder approval pursuant to the
Company’s Articles and regulatory approval, including
approval of the TSX. As a condition to the approval of a
consolidation of shares listed for trading on the TSX, the TSX
requires, among other things, that a TSX listed issuer continue to
meet the TSX’s “Market Value and Public
Distribution” requirements after the share
consolidation.
In
order for the Company to continue to meet the applicable Market
Value and Public Distribution requirements, the Company must have
at least 150 “public security holders” each, holding a
board lot or more, of post-consolidation Common Shares, after
completion of the Consolidation. As a result, the Company may
determine that it is necessary to modify the share consolidation
ratio in order to satisfy the applicable Market Value and Public
Distribution requirements and obtain approval of the Consolidation
from the TSX.
If this
resolution is adopted by the Shareholders, a letter of transmittal
will be mailed to Registered Shareholders to be used to exchange
their pre-Consolidation share certificates for post-Consolidation
share certificates representing the consolidated number of Common
Shares they will own following the Consolidation at such time when
the Board determines to proceed with the Consolidation. No action
will be required by non-Registered Shareholders who hold Common
Shares through an intermediary, to effect the Consolidation of
their beneficially held securities.
At the
Meeting, Shareholders will be asked to vote on the following
ordinary resolution, with or without variation:
“BE IT RESOLVED, as an ordinary resolution of
the shareholders of the Company, THAT:
1.
subject to the
approval of regulatory authorities, including the Toronto Stock
Exchange (“TSX”), the Company be authorized
pursuant to Subsection 9.1(3) of the Company’s Articles, to
consolidate all of the issued and outstanding Common shares of the
Company (the “Common
Shares”) at a ratio between one
(1) post-consolidation Common Share for every five (5) to ten (10)
pre-consolidation Common Shares outstanding, or such other
lesser consolidation ratio as may be determined by the Board of
Directors of the Company and as may be required to obtain approval
of the share consolidation from the TSX, at such time as determined
by the Board of Directors of the Company (the “Consolidation”);
2.
the directors and
officers of the Company are hereby authorized to do all things
necessary in order to give effect to the foregoing resolution,
including applying to the TSX for approval of the Consolidation;
and
3.
the Board of
Directors of the Company be and they are hereby authorized to
revoke the present resolution before it is acted on without
approval of the shareholders of the Company, as well as to delay
the implementation of the Consolidation to a date set by the Board
of Directors of the Company in its discretion.”
Recommendation of Management of the Company
Management
of the Company recommends that you vote IN FAVOUR of the
Consolidation resolution. In the absence of instructions to the
contrary, the Company’s proxyholders will vote the Common
Shares represented by each form of proxy, properly executed, FOR
approving the Consolidation.
INDICATION OF OFFICER AND DIRECTORS
All of
the directors and executive officers of the Company have indicated
that they intend to vote their Common Shares in favour of each of
the above resolutions. In addition, unless authority to do so is
indicated otherwise, the persons named in the enclosed form of
proxy intend to vote the Common Shares represented by such proxies
in favour of each of the above resolutions.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
Certain
information regarding the Plan and the securities of the Company
issued under the Plan are provided as at December 31, 2019 in the
following table:
15
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants
and rights
|
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column
2)
|
|
|
|
|
|
|
Equity
compensation plans approved by securityholders
|
9,677,500
|
$0.31
|
2,988,968
|
|
Equity
compensation plans not approved by securityholders
|
Nil
|
Nil
|
Nil
|
|
Total
|
9,677,500
|
$0.31
|
2,988,968
|
Additional
information concerning the Plan is available in the Company’s
management information circular dated July 25, 2019 and available
on the Company’s SEDAR profile at www.sedar.com.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
As of
January 31, 2020, none of the directors, proposed nominees for
election as directors, executive officers or their respective
associates or affiliates, or other management of the Company are
indebted to the Company or another entity where the indebtedness is
the subject of a guarantee, support agreement, letter of credit or
other similar arrangement or understanding provided by the Company
or its subsidiaries.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
To the
knowledge of the Company, no (i) director or executive officer of
the Company or any of its subsidiaries; (ii) Shareholder (or
director or executive officer of such Shareholder) who beneficially
owns, or controls or directs, directly or indirectly, more than 10%
of the Common Shares; and (iii) associates or affiliates of the
foregoing, had any material interest, direct or indirect, in any
transaction since the commencement of the Company’s most
recently completed financial year or in any proposed transaction
which has materially affected or would materially affect the
Company or any of its subsidiaries.
AUDITORS
Davidson
& Company, LLP has been the Company’s auditor since the
November 21, 2013.
OTHER MATTERS
It is
not known if any other matters will come before the Meeting other
than set forth above and in the Notice of Meeting, but if such
should occur, the persons named in the accompanying Proxy intend to
vote on any poll, on such matters in accordance with their best
judgment, exercising discretionary authority with respect to
amendments or variations of matters identified in the Notice of
Meeting and other matters which may properly come before the
Meeting or any adjournment or postponement thereof.
ADDITIONAL INFORMATION
Additional
information relating to the Company, this Circular, proxy and related
materials are available on the SEDAR website at www.sedar.com under
Prophecy’s profile. Any
further information may be obtained by contacting the Company. If
you have questions, you may contact the Company’s legal
counsel MLT Aikins LLP at 2600-1066 West Hastings Street,
Vancouver, British Columbia, Canada V6E 3X1, Attention: Mahdi Shams
at mshams@mltaikins.com.
APPROVALS
The
contents of this Circular and the sending of it to each Shareholder
entitled to receive notice of the Special Meeting, to each director
of Prophecy and to the appropriate governmental agencies, have been
approved by the Board of Directors.
REGISTRAR AND TRANSFER AGENT
The
registrar and transfer agent of the Company is Computershare
Investor Services Inc., 510 Burrard Street, 3rd Floor, Vancouver,
British Columbia V6C 3B9.
DATED at Vancouver, British Columbia this 31st day of January,
2020.
BY ORDER OF THE BOARD OF DIRECTORS
“Michael Doolin”
Michael Doolin
Chief Executive Officer
16