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Former CEO blasts Alexandria Minerals' allegations as 'ignorant'

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Former CEO blasts Alexandria Minerals' allegations as 'ignorant'

Claiming greater shareholder support in a battle for board control, the former CEO of Alexandria Minerals Corp. blasted some of his former colleagues as "nasty folk" and denied allegations he acted improperly in raising funds or in managing the company's exploration.

"They're ignorant complaints," said Eric Owens, who was fired by Alexandria earlier this year and is now trying to reshape the junior explorer's board of directors.

Owens and Alexandria have recently traded barbs over the management of the company, in the run up to a July 24 shareholder vote over the composition of Alexandria's board. Owens, who called for the meeting, wants to return to the fold and has nominated three directors while calling for the removal of three others.

Alexandria's current board has advised against the nominations and alleged that Owens, when he ran the company, sought to "illicitly" raise C$21.5 million without board approval and that he oversaw a "flawed" exploration program at the company's Orenada gold project in Quebec.

In a June 6 news release, Alexandria said the exploration program led by Owens resulted in a decrease in Orenada resources and not an increase as Owens had promised. Alexandria also said that Owens wasted time and company resources in pursuing a change in the resource model at Orenada, focusing on a bulk tonnage underground operation rather than an open pit.

Alexandria said the change had little impact on the subsequent resource, which outlined 194,522 ounces gold in indicated resources and 126,259 ounces gold in inferred resources. That compares to a 2009 estimate in which Alexandria outlined 392,776 ounces of gold using looser parameters.

Although Alexandria sold off on news of the resource update June 6, Owens called it a success. It "was always intended to be the first step of a multiphase exploration program to discover large gold resources," he said.

He noted exploration backing the resource produced follow-up targets that Alexandria should have drilled in a program he wanted to pursue earlier this year using funds from a financing that the Alexandria board canceled as it explored strategic alternatives for the company.

Alexandria has since alleged that Owens tried to raise C$21.5 million without board approval and that he had some funds deposited in his personal lawyer's account.

"These funds were illicitly obtained without the board's approval and solicited to a limited network of investors selected by Mr. Owens, including his friends and family," Alexandria said in a March 28 news release, claiming that the financing would have been too dilutive for existing shareholders.

Owens denied the allegation that he did not have approval for the financing, saying it "misrepresents the actual situation" and that Alexandria's board of directors was aware he was raising money. "It was with their full approval," he said. He also said that the drill program, and the need to raise money in late 2017 or early 2018, was budgeted for by the company.

He did not address the complaint over how the funds were deposited.

With a shareholder vote almost two months away, there is sure to be more rancor on public display between Owens and Alexandria. Alexandria spokesperson Ian Robertson, who is executive vice president of communication strategy with Kingsdale Advisors, said the company would issue a press release next week going into more detail about its issues with Owens.

In its latest update, Alexandria said that it would consider selling noncore assets and bringing forward warrant exercise deadlines to raise money to focus on exploring targets on its Cadillac Group properties, which includes Orenada.

It is not clear if either side has the upper hand in the shareholder vote. Robertson declined to comment publicly about the level of shareholder support for the board of directors. But Owens claimed, based on his interactions with shareholders so far, that more of them backed him than Alexandria.

"We have a good chance of winning this," he said.