K2 & Associates Responds to Inaccurate Statements Made by GT Gold and Launches Information Site

February 4, 2021 10:57 AM EST

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  • K2 differentiates fact from fiction with respect to GT Gold’s press release dated January 29, 2021
  • K2 announces the launch of www.AbetterGTGold.com, a website for all shareholders to keep up-to-date and stay connected
  • K2 has received a number of disappointing reports on Ashwath Mehra and James Rutherford and encourages stakeholders to utilize the anonymous tip line
  • K2 wishes to thank shareholders who have contacted us to provide continued support

TORONTO, Feb. 04, 2021 (GLOBE NEWSWIRE) -- K2 & Associates Investment Management Inc. (“K2”), one of the largest shareholders of GT Gold Corp. (TSX-V:GTT; OTCQX:GTGDF) (“GT Gold” or the “Company”), holding over 12% of the Company’s shares, wishes to express its displeasure with the inaccurate statements made by GT Gold in its press release dated January 29, 2021.

K2 regards the Company’s press release as an attempt to frame events favourably rather than transparently. The full details do not reflect kindly upon the behavior of Mr. Mehra and Mr. Rutherford in these and many other associated matters.

GT Gold’s press release is rife with deception, most of which does not merit a response until K2’s verification of new information received from whistleblowers is completed.

However, K2 wishes to address two statements made by GT Gold to provide examples of GT Gold’s lack of transparency.

False/misleading statement #1: “The Board pursued a less dilutive financing with existing shareholders, creating no new control block and with the issuance of fewer shares than Muddy Waters’ indicative proposal.”

K2 Response: This is a blatant falsehood. The Board pursued a more dilutive financing, not a less dilutive one. Muddy Waters’ proposal was at a substantially higher price per share than the financing the Board approved. Further, Muddy Waters provided the Company with full discretion on the size of its proposed financing. Any attempt to feign ignorance or confusion on the terms is laughable.

The Board’s decision to pursue a lower priced financing resulted in increased dilution. This notably benefited Mr. Mehra and Mr. Rutherford through their outsized participation.

It requires considerable gall to pursue a more dilutive financing, largely into the hands of insiders, and to claim that the Company pursued a less dilutive option. Then again, it also requires considerable gall for the Executive Chairman of a small-cap exploration company to spend hundreds of thousands of dollars of shareholders’ money on personal expenses largely comprised of first-class flights and five-star accommodations. But, as K2 has been advised, that has not stopped Mr. Mehra from doing so.

False/misleading statement #2: “… K2 demanded that its representative must be guaranteed a seat on any Special Committee of the GT Gold Board formed to look at possible M&A transactions, should they ever arise. … No GT Gold director has such a right and the Board unanimously determined, having consulted on the matter with its external advisors, that this right would not reflect best governance practices. GT Gold therefore offered the Board seat without this inappropriate and atypical right. K2 rejected the offer.”

K2 Response: GT Gold requested that K2 agree to a multi-month delay in announcing the appointment of its representative to the Board. The Company made the request due to alleged concern over the optics of a large shareholder joining the Board following a Company-inflicted collapse in the Company’s share price.

While K2 considered the request highly “atypical”, the request was obliged out of courtesy. In return, K2 required a firm deadline for its representative’s appointment. While Mr. Mehra was evasive and non-committal, a senior Board member, who had been appointed as the lead on the matter, provided his verbal assurance that the appointment would occur by September 6th, 2020. This provided a greater than 6 week grace period despite the process having already advanced considerably.

As proof of K2’s earnest intentions to assist the Company, K2 agreed to Mr. Mehra’s demands for an 18-month standstill and voting support agreement. K2’s approval was given despite only requesting a single seat and having purchased nearly its entire position in the open market. With only a single seat on a nine-person board, and the Board in control of K2 voting rights, K2 was being required and agreed to place an immense amount of trust in the Board’s conduct.

The Board ignored the agreed upon deadline. It did not send over the agreements for review until after the deadline passed, despite multiple requests to send them in advance.

K2’s trust and confidence in the GT Gold Board deteriorated through their dysfunction.

Critically, the Board and Mr. Mehra expressed a willingness to consider K2 for Special Committee membership should the need arise; however, K2 became aware, in a manner that it deemed credible, that Mr. Mehra was underhandedly pursuing the case internally for the Board to exclude K2 from any such committees.

It did not take long for K2 to become wary any time Mr. Mehra reached out his hand.

K2 intends to release the full account of its and the Company’s respective actions at a later date. K2 will address the matters referred to in the Company’s recent press release, as well as numerous others.

Shareholders wishing to learn more can visit K2’s website, www.AbetterGTGold.com, to keep them up-to-date on all matters pertaining to GT Gold.

ABOUT K2 & Associates Investment Management

K2 is an Ontario-based hedge fund manager with a 20-year track record of successfully managing money and creating value for our shareholders and stakeholders at large.

For more information about K2, visit www.K2.ca.

FOR MORE INFORMATION:Marcus CampbellSenior Vice President, StrategyGryphon Advisors Inc.Email: mcampbell@gryphonadvisors.ca

Source: K2 & Associates Investment Management Inc.


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