Muddy Waters won’t compensate its nominees on Mayfair Gold as shareholder vote looms

Mayfair Gold’s Fenn-Gib project in the Timmins region of northeastern Ontario. Credit: Mayfair Gold Corp.

Short seller Muddy Waters Capital said on Thursday that none of its newly proposed directors for Canadian miner Mayfair Gold’s board will receive any remuneration, in contrast to what it called the “inappropriate compensation” earned by the company’s existing directors.

Muddy Waters is seeking to replace Mayfair Gold’s current board and replace its members with Muddy Water executives, saying the board was delaying the advancement of its key Fenn-Gib gold project and calling out the company’s compensation structure.

“No Muddy Waters director will be compensated, in contrast to the present situation where insiders appear to have treated both equity and cash as Monopoly money,” Carson Block, founder and chief investment officer of Muddy Waters, told Reuters in an emailed statement.

Block is preparing for a public showdown with the junior gold miner, as shareholders vote on June 5 proposal to remove the current board.

Last month, Muddy Waters said its clients and principals had significant investments in Mayfair Gold and that the company needs a team that is focused on all stakeholders and operating under high standards of governance. In March, it said that in the future the firm could increase or decrease its control or direction over securities of the company through open market transactions, private agreements or otherwise.

Mayfair Gold declined to comment.

Mayfair Gold’s board in January raised its CEO’s annual compensation from C$357,000 to C$400,000 ($262,210 to $293,794) effective immediately. At the same time, the annual retainer fee for board members was increased to between C$30,000 and C$50,000 and the board chair’s fee to between C$50,000 and C$75,000. The company said the compensation was benchmarked to its peer group.

In a letter sent on May 9, Mayfair Gold’s board made a last attempt to persuade shareholders to vote against the proposal, saying the list of individuals proposed by Muddy Waters lack experience that could set back the project and lead to the company’s delisting.

In 2021 the short seller launched a similar campaign against GT Gold. It took a majority position in the company and later sold it to Newmont Corporation.

($1 = 1.3615 Canadian dollars)

(By Divya Rajagopal; Editing by Jonathan Oatis)


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