FOR: NAXOS RESOURCES LTD.
FOR FURTHER INFORMATION CONTACT
INVESTOR RELATIONS: Jeff Sharp (913) 894 - 8509
Letter from the President
July 23, 1999
Dear Shareholders;
I am writing to you at this time as you are owed an explanation of the convoluted events of the recent weeks which culminated in the resignations from the Board of three of Father Gregory's nominees, Lloyd Brewer, Gerard Gallissant, and Dr. Lawrence Brierly.
There have also been a series of rumors, half-truths and innuendo, both spoken and in print, which need to be addressed. Some of these, we believe, have been deliberately fabricated in efforts to discredit certain Board members known to be clearly unsupportive of Father Gregory's efforts to gain control of the Company. Such personal attacks which are without any basis whatsoever in fact are not only unconscionable but also reprehensible.
The Board meeting which Father Gregory was invited to attend went ahead as scheduled, and despite reminding him he was still welcome, he unfortunately did not attend. I should also mention that at the July 12 board meeting, Bruce Downing wanted to put a motion forward which was to invite Father Gregory to the board, but he was unfortunately overruled by Mr. Brewer before this motion could be made.
We need to break our silence and would have done so much sooner had we not believed there was a chance for a true compromise. We didn't want to jeopardize any discussions that were going on and believed his four people coming to the Board would be truly acting in the spirit of moving the Company forward. In fact to my knowledge, only one of Father Gregory's nominees, B. Downing, has done correct due diligence as is required when taking a seat on the Board. Mr. Downing, a Professional Geologist with over twenty-five years of experience in the industry, spent three days as part of his due diligence process at Franklin Lake and was very encouraged with the potential of the area. His recommendations form part of the business plan.
The major goal of the Company is to create profitability and thus improve shareholder value. With a company with a track history such as Naxos, a major difficulty in doing so is overcoming the hurdle of the negative image which has and continues to overshadow us in light of the trading halts, ASE case, the controversies during the stewardship of Jimmy John, and now the Father Gregory battle. This image very negatively impacts our ability to raise capital leaving the exercise of options and continued private placements at low prices our only method of funding operations. With 31,000,000 plus shares outstanding the Company must look for projects where it can become self-funding. We arrive thus at a major short-term goal of finding ways to improve our image.
A Business Development Framework has been completed. This is a proposed plan setting out the Company's structure, assets, and short to long term objectives. It is by no means a comprehensive study, but is an attempt at defining a vision with a sense of the company's direction and future state.
Martin Blake (project manager) has already acted upon several of the ideas arising from this business plan with positive results. We are in the process of negotiation with a major firm regarding an initial exploration program for lithium at Franklin Lake. Lithium has always been recognized as a potential resource, and we are following up on this, as initial testing has shown high levels of lithium. Preliminary prospecting of the Franklin Lake area for lode gold has provided us with some encouraging results. We have also begun some environmental reclamation in order to comply with our reclamation bond.
In regards to the lithium project, a 1980 Bureau of Land Management Report has stated that “economic studies by BLM indicated an estimated $52 million worth of lithium in the brines of Alkali Flat” (there are based on 1980 values and dollars). Upon investigation it was found that lithium exploration was also recommended in past reports by respected geologists. It should also be noted that of 30,000 acres under claim less than 3,000 have been actively explored, leaving what we believe to be a huge potential ripe for exploration. At the same time, whatever is in the ground in terms of colloidal gold and other precious metals will not go away. What we propose to do is aggressively pursue any and all of these routes while at the same time continue on a parallel path to actively support any efforts at solving the riddle of the gold in the clays. Great Lakes Chemical is continuing their study of the bromine leach process. A second process is now being tested by another company, at no expense to us. Preliminary results have been very promising.
What we believe we are giving the Company for the first time in its history is a really good shot at its becoming self-funding which would bring us tremendous credibility. And once we have the creditability whatever else we do will not be put up to such questions. We will not be under attack by short sellers or by non-believers because we will be a Company with a proven track record.
We have attempted to pass a business plan but were continually stymied and stalled by those same Board members who at the same time presented no plan from the people that they represented. It is now time to share our plan with you. The full plan in an abridged form will be available by email or fax to shareholders that are interested by sending a request to this office.
We are continuing to discuss with interested parties some financial solutions to raise capital in order to carry out the business plan.
Sincerely,
“Signed”
Robert Gardner
President
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