The Conversation (0)
Majestic Gold is Trading at a Substantial Discount to the Cash and Cash Equivalents on its Balance Sheet
Majestic Gold has Ample Cash and No Immediate Need for Financing
The Non-Brokered Private Placement is Highly Dilutive to Shareholders and May Materially Affect Control of Majestic Gold
The Board of Directors is due for Re-election, and the Upcoming Annual General Meeting will Allow Shareholders to Voice their Concerns and Exercise Shareholder Rights
The Concerned Shareholder Has Requisitioned the Annual General Meeting, and Majestic Gold is Urged to Refrain from Taking Actions that Entrench Management or that is Out of the Ordinary Course of Business Until the Meeting has been Held, and There is a Renewed Mandate from Shareholders
Vancouver, British Columbia--(Newsfile Corp. - June 2, 2026) - Mr. Fan Zhong Kong, who holds approximately 12.79% of the issued and outstanding common shares of Majestic Gold Corp. (TSXV: MJS,OTC:MJGCF) (the "Company" or "Majestic Gold") hereby sets out his concerns with and objection to the proposed non-brokered private placement by the Company for gross proceeds of up to CAD$50,000,000 through the issuance of up to 384,615,385 common shares of the Company at a price of CAD$0.13 per share (the "Non-brokered Private Placement").
Based on the Company's latest financial statements, as at March 31, 2026, the Company had cash and cash equivalents of US$171,631,786 of which US$11,414,066 was held in Canada, US$68,949,824 was held in Hong Kong, and the remaining balance of US$91,267,896 was held in China.
Based on the CAD$0.15 closing price of the Company's common shares and the Bank of Canada exchange rate on May 20, 2026, the last trading day before the announcement of the Non-brokered Private Placement, and the Company's issued and outstanding 1,042,664,381 common shares, the Company's market capitalization was CAD$156,399,657.15 (or ~US$113,733,830).
The private placement issue price of CAD$0.13 per share values the Company at a further reduced market capitalization of CAD$135,546,369 (or ~US$98,569,320) as at the close of the trading day on May 20, 2026 based on the Bank of Canada exchange rate.
The private placement issue price of CAD$0.13 values the Company's market capitalization at only 57% of the cash and cash equivalents on its balance sheet as at March 31, 2026. The Company's cash balance would have only increased since then. Investors in the Non-brokered Private Placement are essentially paying CAD$0.57 to buy $1.00 of cash, and paying nil for the Company's profitable and producing gold mines.
Despite a record bull market for gold prices over the past two years, the Company's share price has languished. The Company has a profitable business, yet management has failed to convince the market of the Company's value, and shareholders have suffered as a result.
The Company has ample cash to sustain operations, carry out its existing capital programs, and pursue new business opportunities.
The Non-brokered Private Placement would also increase the Company's issued and outstanding capital by up to 36.9%.
Given the depressed share price and the ample cash, there is no need to raise capital at all. Yet the Company has chosen to undertake a highly dilutive financing at a discount to market price on a non-brokered basis to unknown select investors. If completed, the Non-brokered Private Placement could materially affect control of the Company and entrench current management.
The Company last held its AGM on June 26, 2025. The mandate of the current board is expiring as it is due to hold its next annual general meeting. As the Company has yet to call the annual general meeting, Mr. Kong has requisitioned the Company to proceed immediately to call the meeting.
Mr. Kong urges the Company to withdraw the Non-brokered Private Placement, and to refrain from taking actions that entrench management or that is out of the ordinary course of business. The Company must hold its annual general meeting, and shareholders must have an opportunity to voice their opinions on the board.
For further information, please contact James Chen at 778-397-6888.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/299863
