Reasons to Reject


Your Board of Directors recommends that Commander Shareholders REJECT the Hostile Bid by Fruchtexpress Grabher GmbH & Co KG to purchase all of the common shares of Commander Resources Ltd.

There is no need for Commander Shareholders to do anything immediately. The Hostile Bid is currently open until September 6, 2024. Commander's Board of Directors intends to communicate further with Commander Shareholders prior to the expiry of the Hostile Bid.

If you have already tendered your Commander Shares to the Hostile Bid, you should WITHDRAW them.

The Board of Directors has carefully reviewed and considered the Hostile Bid, with the benefit of recommendations from the Special Committee, the Inadequacy Opinion from the Financial Advisor and advice from independent legal counsel. The following is a summary of the principal reasons for the recommendation of the Board of Directors to Commander Shareholders that they REJECT the Hostile Bid and NOT TENDER their Commander Shares to the Hostile Bid.

The Board of Directors believes that:

  1. The Hostile Bid is self-serving and predatory
    • The Hostile Bid is disadvantageous to Commander Shareholders and is a predatory offer by an insider shareholder. The cost of acquiring Commander shares not already owned by FEx under the Hostile Bid would be less than the current Company cash balance, after accounting for the recently completed non-core royalty portfolio sale. If the Hostile Bid was successful, FEx would effectively be acquiring the Company for free or at a cash gain, while attributing no or negative value to the principal properties and business of the Company.
    • FEx has not expressed any concern with Commander's management or the Commander Board on Company strategy and has not withheld their votes against any proposed voting item at the Company's annual general meetings since FEx became a shareholder in 2019.
  2. The timing of the Hostile Bid is highly opportunistic
    • The timing of the Hostile Bid is highly opportunistic, with Commander shares trading at multi-year lows while the broader market for mining equities was recovering from multi-year underperformance. For example, in the period from January 1, 2021 to the last trading day prior to FEx announcing its intention to make the Hostile Bid (March 1, 2024), Commander's shares decreased by 68% in a broadly depressed market for mining equities, particularly junior exploration companies (e.g., the highly liquid VanEck Junior Gold Miners ETF benchmark was down 34% over the same period). Furthermore, the Hostile Bid was made shortly after the Company announced the royalty sale which would bring in material, non-dilutive cash proceeds into Company treasury, proceeds which would go to FEx should the Hostile Bid be successful.
  3. The Hostile Bid significantly undervalues the Company
    • Not only is the Hostile Bid lower than cash value of the Company after accounting for the recently completed non-core royalty portfolio sale, but the Hostile Bid fails to take into account any value for the principal properties and business of the Company which includes 7 wholly-owned properties and 2 royalties in Canada as well as 4 joint venture agreements.
  4. The Hostile Bid eliminates all future upside exposure for Commander Shareholders
    • The Hostile Bid will eliminate the potential for any future increase in value of Commander's properties or prospects accruing to the Commander Shareholders because they will cease to hold Commander shares, and any such potential future increase in value will be owned solely by FEx, particularly in light of the recent receipt of material non-dilutive funding from the sale of the non-core royalty portfolio for US$4.1M in cash. Proceeds from which the Company intends to use to fund drilling of top priority projects as well as advance the next tier of 100% owned exploration projects as well as for any targeted opportunities to grow the Company's exposure to premium exploration projects, primarily in the copper-gold space.
    • Commander's Board and management plan to deploy the recently received cash proceeds into exploration opportunities at a time where the market for copper and gold appears to be gaining momentum and will reward such activity. Any opportunity to surface shareholder value under this plan will be lost if FEx takes the Company private and gains control over Commander's funds for its own benefit. The Hostile Bid is insufficient to make up for that lost opportunity.
  5. Commander has a strong balance sheet and no near-term dilution risk for Shareholders
    • With approximately C$5.5M in cash on the balance sheet, Commander is in an enviable position, particularly amongst its junior exploration peer group. The Company is well setup to pursue value maximizing opportunities for Shareholders, with no risk of near-term dilution. FEx is essentially attempting to use the Company's (and by extension its Shareholders') own financial position to acquire the Company for free.
  6. The Hostile Bid is financially inadequate
    • The Commander Board and Special Committee has received a written opinion from the Financial Advisor, that as of June 4, 2024 and based on and subject to the assumptions, limitations and qualifications set forth therein and other such matters that the Financial Advisor considered relevant, the Financial Advisor was of the opinion that the cash consideration to be received by the Commander Shareholders (other than FEx and its affiliates) under the Hostile Bid is inadequate, from a financial point of view, to Commander Shareholders.
  7. Commander Board and management are actively pursuing potential strategic alternatives
    • Commander's management and the Commander Board are evaluating a range of strategic alternatives, any of which might be more favorable to Commander Shareholders when compared with the Hostile Bid.
  8. Rejection of the Hostile Bid by Commander's directors and officers
    • The directors and officers of Commander do not intend to tender any of their shares to the Hostile Bid. The directors and officers of Commander, after giving effect to exercise of all of their stock options and warrants, would hold an aggregate of 2,962,523 shares, representing approximately 6.67% of the outstanding shares on a fully-diluted in-the-money basis.
  9. The Hostile Bid is highly conditional
    • The Board is concerned that the Hostile Bid is conditional upon a number of conditions which must be satisfied or waived before FEx is obligated to take up and pay for any Commander shares tendered into the Hostile Bid. Many of the conditions are not subject to a materiality threshold but rather provide FEx with very broad discretion to decline to proceed with the Hostile Bid. Tendering to the Hostile Bid would be effectively granting FEx with an unfair option to withdraw or proceed with its Hostile Bid in its sole discretion.

FeX Hostile Bid