CUSIP No. |
04957F101 |
Page | 2 |
of | 6 |
1 | NAMES OF REPORTING PERSONS Lloyd I. Miller, III |
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2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) |
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(a) o | |||||||||||
(b) o | |||||||||||
3 | SEC USE ONLY | ||||||||||
4 | SOURCE OF FUNDS (SEE INSTRUCTIONS) | ||||||||||
PF-AF-OO | |||||||||||
5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) | ||||||||||
o | |||||||||||
6 | CITIZENSHIP OR PLACE OF ORGANIZATION | ||||||||||
United States | |||||||||||
7 | SOLE VOTING POWER | ||||||||||
NUMBER OF | 12,310,133 | ||||||||||
SHARES | 8 | SHARED VOTING POWER | |||||||||
BENEFICIALLY | |||||||||||
OWNED BY | 0 | ||||||||||
EACH | 9 | SOLE DISPOSITIVE POWER | |||||||||
REPORTING | |||||||||||
PERSON | 12,310,133 | ||||||||||
WITH | 10 | SHARED DISPOSITIVE POWER | |||||||||
0 | |||||||||||
11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | ||||||||||
12,310,133 | |||||||||||
12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) | ||||||||||
o | |||||||||||
13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | ||||||||||
12.2% | |||||||||||
14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) | ||||||||||
IN-IA-OO |
Item 4. | Purpose of the Transaction |
| On January 7, 2011, Mr. Miller file a Schedule 13D to report his intention to engage in discussions with the Board of Directors of the Company (the Board) and management of Atna, regarding Atna, its prospects and potential means for enhancing shareholder value, including without limitation, with respect to potential changes in the business, strategy or Board composition of Atna. Mr. Miller also disclosed that he may seek to initiate or participate in such other actions as he deems necessary to enhance the value of his investment in Atna, including without limitation, actions intended to cause changes to the business, strategy or Board composition of Atna and which may include seeking to add nominees designated by Mr. Miller to the Board and/or removing individuals from the Board, requisitioning a meeting of shareholders of Atna and soliciting proxies in connection therewith, and/or making one or more shareholder proposals in connection with Atna. | ||
| On March 25, 2011, Stikeman Elliott LLP, Canadian legal counsel to Mr. Miller, sent a letter on behalf of Mr. Miller to the Board, which was filed as Exhibit 99.1 to Mr. Millers Amendment No. 1 to the Schedule 13D dated March 29, 2011, stating the following: |
| Mr. Miller recommended that Steven Harmsen, Steve Scheiwe and Alan Howe be included as management nominees in the Companys proxy circular for the upcoming Company shareholders meeting scheduled for May 6, 2011 (the Meeting). Mr. Miller believes that these nominees possess strong, independent business track records, and desires to see the Board possessed of persons who are acting entirely in the interests of shareholders with a view to creating long-term shareholder value. | ||
| Mr. Miller is extremely disappointed that the current Board approved the recent bought deal financing for the Company which closed on December 2, 2010. Pursuant to this financing, the Company issued 13,350,000 units at a price of C$0.60 per unit which caused serious dilution for existing shareholders. Rather than looking to find partners or sell properties, the Company seems content to finance its expansion through poorly thought out transactions that are dilutive to |
shareholders. This, coupled with the Companys failure to meet its expected gold production at the Briggs Mine by over 30% in 2010, are the reasons that Mr. Miller seeks to reconstitute the Board. |
| If the Board fails to include Mr. Millers nominees as management nominees in the Companys proxy circular for the Meeting, Mr. Miller intends to solicit proxies for their election. | ||
| In addition, Mr. Miller requested that the Company allow individual director voting at the Meeting rather than be provided with the limited option of voting for a slate of directors. |
| On April 14, 2011, Mr. Miller mailed a dissident proxy circular (the Circular) and form of proxy (Proxy Card) to the shareholders of the Company seeking to elect Steve Harmsen, Steven Scheiwe and Alan Howe to the Board at the Meeting, which were filed as Exhibits 99.2 and 99.3 to Mr. Millers Amendment No. 2 to the Schedule 13D dated April 15, 2011, and stated that the reasons that he was taking this action included the following: |
| Mr. Miller believes that the current Board has delivered poor operating results and has issued common shares at historically low prices and at a significant discount to the market. | ||
| The Companys share price has declined approximately 65% since its high in 2008. At the same time, stock markets have been strong and during the same time period the price of gold has increased from approximately US$880 per ounce to a record high of more than US$1470 per ounce on April 8, 2011. | ||
| Mr. Miller does not believe that the Company can create value for shareholders by building and operating a mine that produces materially less gold than forecast with cash production costs that are substantially higher than forecast. | ||
| Mr. Miler believes that, if the results from the Briggs gold mining property would have been known at the time of making the capital commitment, Briggs would never have been built. | ||
| Mr. Miller further believes that the value destruction to shareholders has been amplified by the Company completing a material financing at a significant discount to market. Since 2008, the Board has also raised funds through a US$14.5 million bond offering and a US$1.5 million convertible debt offering diluting shareholders by almost 35% in 3 years. | ||
| Mr. Miller further believes there is no indication whatsoever of any clear strategy for value enhancement and thus Mr. Miller believes that a change of leadership is necessary. Mr. Miller is deeply concerned with the current leadership at the Company and believes that the Board has had its chance to bring value to the Company and has failed. | ||
| Mr. Miller further believes that that the nominees set forth in the Circular will bring accountability and leadership, add value and protect the interests of all |
shareholders. The nominees will provide an injection of new ideas and strategic perspectives to the Company. Mr. Miller believes that, by acting as the catalyst on behalf of the many suffering shareholders who want to see the decline in stock price halted and sustainable growth for the Company created, all shareholders will benefit. |
| Mr. Miller wishes to submit two proposals to the Board as follows: |
| Pursuant to proposal one, Mr. Miller shall have the right to nominate two new directors to the Board and the Company will take any and all immediate steps necessary to appoint such nominees to the Board. Concurrently with the appointment of Mr. Millers nominees to the Board, incumbent directors shall resign from the Board, and such resignations will be determined exclusively by the current Board. Further, Mr. Miller agrees to execute a standstill agreement providing that, for a one-year period commencing on the date of execution of such standstill agreement, Mr. Miller shall not run any new director nominees for election and appointment to the Board. Additionally, the standstill agreement would contain customary provisions for agreements of this nature. | ||
| Pursuant to proposal number two, Mr. Miller shall have the right to nominate one new director to the Board, and the Company will take any and all immediate steps necessary to appoint such nominee to the Board. Mr. Millers nominee, together with one current independent director of Atna, shall form a mixed nominating committee for purposes of strengthening the Board. Such mixed nominating committee, together with input from other large investors, shall then select two or three mutually agreed upon new independent directors who shall be appointed to the Board. Concurrently which such appointment, two or three incumbent directors shall resign from the Board, and such resignations to be determined exclusively by the current Board. Recommendations with respect to new directors may be submitted by the Board, Mr. Miller and an outside search agency if any such agency is engaged by the mixed nominating committee. |
| Although Mr. Miller commends the Company on its recently stated strategy disclosed in the May 9, 2011 press release, and is encouraged by the contents of the May 9, 2011 press release and by the Boards willingness to engage in constructive dialogue with him, he remains concerned about the possibility of Atna undertaking a further dilutive financing. Accordingly, Mr. Miller asks that the Board, as an indication of good faith, agree for so long as discussions are ongoing, to permit Mr. Miller to participate in any equity financing, pro rata to his shareholding, to prevent any further dilution. Mr. Miller further stated that, if the Board is not willing to put such an agreement in writing, and if the Board does proceed with a dilutive financing, Mr. Miller may take and pursue every recourse available to prevent such a financing. |
| Stikeman Elliott LLP requests a reply by the Board to the items set forth in this letter no later than June 10, 2011. If Stikeman Elliott LLP does not receive a positive response by such date, they will assume that the Board is not prepared to accept either of the two proposals. If the Board is not agreeable to either proposal, Mr. Miller reserves all of his legal rights as a shareholder of Atna. | ||
| Mr. Millers proposals are described more fully in the May 11 Letter set forth as Exhibit 99.4 to this Amendment No. 3. |
Item 7. | Materials to be Filed as Exhibits: |
By: | /s/ Lloyd I. Miller, III | |||
Lloyd I. Miller, III | ||||
Zev Zelman Direct: Fax: E-mail: |
(514) 397-3123 (514) 397-3443 zzelman@stikeman.com |
Re:
|
Settlement Proposal to the Board of Directors of Atna Resources Ltd. (Atna) |
| Miller shall have the right to nominate two new directors to the Board; Atna will take any and all immediate steps necessary to appoint such nominees to the Board. | ||
| Concurrently with the appointment of Millers nominees to the Board, 2 incumbent directors shall resign from the Board, such resignations to be determined exclusively by the current Board. |
| Miller agrees to execute a standstill agreement providing that for a one year period commencing on the date of execution of such standstill agreement, Miller shall not run any new director nominees for election and appointment to the Board; Additionally, the standstill agreement would contain customary provisions for agreements of this nature. |
| Miller shall have the right to nominate one new director to the Board; Atna will take any and all immediate steps necessary to appoint such nominee to the Board. | ||
| Millers nominee, together with one current independent director of Atna, shall form a mixed nominating committee for the purpose of strengthening the Board; Such mixed nominating committee, together with input from other large investors, shall then select 2 or 3 mutually agreed upon new independent directors who shall be appointed to the Board; Concurrently which such appointment, 2 or 3 incumbent directors shall resign from the Board, such resignations to be determined exclusively by the current Board. | ||
| Recommendations with respect to new directors may be submitted by the Board, Miller and an outside search agency if any such agency is engaged by the mixed nominating committee. |
c.c.:
|
James K.B. Hesketh, CEO, President and Director, Atna Resources Ltd. David H. Watkins, Chairman, Atna Resources Ltd. Glen D. Dickson, Director, Atna Resources Ltd. Ronald D. Parker, Director, Atna Resources Ltd. David Fagin, Director, Atna Resources Ltd. Christopher E. Herald, Director, Atna Resources Ltd. Paul H. Zink, Director, Atna Resources Ltd. David Hunter, Bull, Housser & Tupper LLP Lloyd I. Miller, III John Stark, Stikeman Elliott LLP Lisa Trienis, Stikeman Elliott LLP Steve Balet, Okapi Partners LLC |
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