Sasco Partners Sends Open Letter to Shareholders of Samex Mining

HOUSTON, Dec. 15, 2011 /PRNewswire/ -- Sasco Partners, LP (together with its affiliates, "Sasco"), the largest shareholder of Samex Mining Corp. ("Samex" or the "Company") (TSX-V: SXG.V) (OTC.BB: SMXMF.OB), today announced that it delivered an open letter to Samex shareholders.  In the letter, Sasco expressed its deep disappointment with the executive team's mismanagement, slow pace of drilling, and empty promises to shareholders.  Sasco further shared its concern over the lack of shareholder representation on the Samex board of directors.  Sasco stated that the status quo is unacceptable and outlined a plan to seek (i) the designation of the current President and CEO, Jeff Dahl, as a Vice President, (ii) the appointment of a seasoned mining executive as President and CEO, to be based out of Santiago or Copiapo, in close proximity to Samex' geological team and (iii) the replacement of three of the current Samex directors.  Sasco is optimistic that these changes will be in the best interests of shareholders and further speed the Company's exploration progress going forward.

The full text of the letter follows:

December 15, 2011

Dear Fellow Samex Shareholders,

Like you, I was excited to invest in Samex Mining Corp. ("Samex" or the "Company") because of its impressive Los Zorros property in Chile and brilliant geological team.  I still am.  However, I have come to realize since my substantial private placement last year that management has not had the best interests of shareholders at heart.  Their actions have sent the message that they care more about utilizing shareholder capital for the sake of salary longevity rather than exploration drilling.  As the single largest controlling shareholder of Samex, with ownership of 29,484,368 shares, or approximately 23.26% of the outstanding shares, I believe it is in the best interests of investors to seek changes in the way the Company does business.  I will do my best here to summarize the main issues thus far and what should be done going forward.

-Despite having well over $9 million in funding for more than a year now, the Company has averaged just 0.5 rigs of drilling annually.  Management only days ago brought out a second rig after numerous months of constant pleading from me to finally start spending adequate capital on drilling.  In a similar vein, no serious effort was put into the recruitment of additional geologists for our exploration team in Chile until the past few months.  It was only after my numerous phone calls, emails, and in-person visits, demanding more progress in acquiring geologists, that the management team got focused on recruiting.  It is no surprise that within a few months we managed to recruit quite a few bright geologists once the right strategies were implemented.

-Management's execution pace leaves a lot to be desired in a world where time is money.  In a December 17, 2010 press release, Samex affirmed it would start drilling on the Nora project "early in the first quarter of 2011."  Yet drilling did not commence until November 2011, roughly 10 months past due.  Then following completion of the Titan 24 testing in February of this year, drilling did not resume again until July - approximately 5 months later.  That equates to almost half the year where no drilling took place, all the while our Company still had to dole out substantial salary and overhead expenses. 

-The Company's transparency and communication with investors is in dire need of improvement.  Furthermore, our corporate website is quite simply an abomination.  It is not only harsh on the eyes, but does an incredibly poor job of articulating the Company's prospects.  Visitors should be able to clearly see maps of our projects, drill results, etc. within 30 seconds - as is the case with websites of almost every other mining company.  

-Management has also forgotten its promises to shareholders.  For example, after my substantial private placement finalized in November 2010, Jeff Dahl vowed the funding would "allow us to not only expand, but accelerate our exploration efforts."  Then, again in a May 3, 2011 letter to shareholders, Jeff Dahl asserted that the Company was "in a very strong position to advance our large exploration agenda on a more vigorous and continuous basis."  Clearly, reality has not matched the rhetoric. 

-Aside from Rob Kell, who spends most of his year in Chile, the rest of our executives choose to perform their duties largely from the comforts of their hometown in Abbotsford, Canada.  There is no reason why both our CEO and VP of Operations cannot work in Chile on a full-time basis.  Quite frankly, who can effectively manage a business from another continent?  We need executives with strong dedication in order to ensure Samex maximizes the efficiency of its exploration agenda in Chile.   

-The composition of the Company's board of directors is severely lacking by both Canadian and international standards.  Investor interests are not adequately represented by even one seat on our six-person board.  It is my belief that investor interests should comprise at least half of the board going forward.  After all, we are the owners of the business.  Perhaps if this had been the case all along, more than 90% of our stock option allowance would not have been generously awarded over the years largely to individuals who reside full-time in Canada.  Options are a tool to recruit talent to our Company.  They should not be handed out like party favors amongst friends year after year.   

In response to all of this, management may tell you that patience and understanding are required in exploration.  They may provide a laundry list of excuses as to why certain things have not been done on time, or even at all.  Unfortunately, this is not a matter of patience and understanding but rather of performance and accountability.  The good news is that these are all fixable problems.  I am interested in solutions for our Company, not excuses.  That is precisely why I have recently offered management a very effective three-point plan aimed at solving the above-listed issues:

A) The resignation of Jeff Dahl from his position as President and CEO.  Mr. Dahl would continue to serve the Company as a Vice President in Canada.  It is my belief that he has been a thoughtful visionary, yet ineffective executor.  A management team cannot successfully lead from afar.  

B) The appointment of a seasoned mining executive as President and CEO of Samex.  This executive would work full-time out of an office in Santiago or Copiapo.  Their experience and proximity would greatly assist the geological team in achieving its goals. 

C) The appointment of three new directors to replace half of our current board of directors.  These directors would be chosen by Sasco Partners to represent the best interests of investors.  As a result of such action, we believe that the actual owners of the business would have an important voice in critical decisions moving forward. 

We believe the status quo will only result in more delays, dilution, and continued disappointment.  We need a team that is fully dedicated to the mission of drilling our prized projects in Chile.  Now that I have fully explained my viewpoint on Samex, I hope you will do the same.  As the largest shareholder of Samex, I have already heard strong, supportive feedback from numerous investors as of late.  I will always welcome calls and emails from fellow investors who are serious about unlocking the full potential of our Company.  

Warmest Regards,

Sasan Sadeghpour
Chief Investment Officer
Sasco Investments, Manager of Sasco Partners

Contact:
Sasco Partners, LP
Sasan Sadeghpour, (713) 956-5200 (ext. 102)

SOURCE Sasco Partners, LP