FREIENBACH, Switzerland--(BUSINESS WIRE)-- iolite Capital Management AG, a Switzerland-based investment manager (“iolite”), as representative of iolite Partners Ltd. called a special meeting of the holders ("Shareholders") of common shares of Dynacor Group Inc. (the “Company”) to elect Robert Leitz to the board of directors of the Company which is scheduled to take place on April 16, 2025 (the "Meeting").

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• A judge of the Superior Court of Quebec refused to grant a provisional injunction to stop the Meeting.
• What did Dynacor do on Monday? They doubled down — further escalating with more unsubstantiated, increasingly aggressive and personal attacks.
• This only highlights how out of touch current leadership has become — with reality and with the true owners of the business. It’s time to hold them accountable.
• Dynacor needs a board that listens, acts responsibly, and puts shareholders first — not one clinging to power through fear and misdirection.

VOTE:

1. REVISED BLUE PROXY: FOR a resolution to set the number of directors of the Company at nine persons
2. REVISED BLUE PROXY: FOR the election of Mr. Robert Leitz
3. REVISED BLUE PROXY: AGAINST management’s proposal that iolite be responsible for costs associated with the Meeting

AS DYNACOR HAS ISSUED A PROXY FORM CALLING FOR A RESOLUTION THAT IOLITE BE RESPONSIBLE FOR COSTS ASSOCIATED WITH THE MEETING, SHAREHOLDERS SHOULD USE THE REVISED FORM OF BLUE PROXY ATTACHED TO THIS PRESS RELEASE WHICH INCLUDES THAT ITEM. NOTE: IF YOU HAVE ALREADY SENT IN YOUR PROXY AND VOTED FOR ITEMS 1 & 2 ABOVE AND DO NOT SEND IN A REVISED PROXY, THE PROXY HOLDER WILL USE ITS DISCRETION TO VOTE AGAINST ITEM 3 ABOVE.

In Dynacor’s press release and proxy materials filed March 31, 2025, the Company claims:

1. Performance is on track thanks to its “superior” leadership team
2. iolite is self-serving and misaligned with shareholder interests
3. Robert Leitz, iolite’s nominee, lacks the necessary skills and experience to serve as a director
4. iolite’s actions have caused unnecessary costs
5. the Meeting is “unauthorized and unnecessary”

Let’s set the record straight:

1. Performance Shortcomings

1. Share price: Down 24% since the raise — while gold is up 29% YTD. That’s underperformance, plain and simple.
2. Q4 2024: Record sales (+11% yoy) resulted in a 52% drop in net income yoy — to just US$1.7 million. A meagre 2.4% profit margin despite record sales is both disappointing and alarming.
3. Balance sheet: As of December 2024, the unleveraged Company held US$61 million in net cash and working capital — before the US$23 million raise. With at least US$20 million in achievable annual cash flow, Dynacor had US$80 million in near-term liquidity (now US$100 million). There is no financial justification for the raise.
4. Guidance: The projected 5% profit margin is a multi-year low — down from 8% in Q3 — despite record volumes and record high gold prices. In a rising gold price environment, inventory gains should boost margins, not compress them.
5. Ecuador: The publicized letter of intent is non-binding, subject to due diligence, and follows over a year of discussions with the sellers. This is no breakthrough — just another clumsy narrative shift to justify poor decisions.
6. Tumipampa: With gold prices exceeding US$3,000 per ounce, the Company has a clear opportunity to monetize Tumipampa — a non-core exploration asset valued at ~US$15 million on the balance sheet. Yet management remains silent, with no visible initiative or progress.

2. Who’s Acting in Shareholders’ Best Interests?

The board makes baseless claims that iolite is “self-serving” and misaligned, and the Company’s press release is riddled with false and misleading statements. Here are the facts:

1. Dividend: iolite favored buybacks over a dividend hike, citing the Company’s undervaluation and the superior tax efficiency of repurchases. Nonetheless, iolite consistently accepted the current dividend rate and repeatedly proposed offering income-oriented shareholders the option to convert common shares into 8% preferred shares — a win-win. The board refused, dismissing the idea by claiming there was “no shareholder interest.”
2. Buybacks: iolite supported more aggressive buybacks to deploy the Company’s growing cash pile and address undervaluation — emphasizing long-term value creation, not short-term price manipulation.
3. Inconsistent capital allocation: The board suspended buybacks to pursue a dilutive raise — only to increase the dividend just before that same raise. Now more cash is going out, with no clear strategic benefit.
4. True alignment: iolite is the Company’s largest owner — with substantial capital at risk and fully aligned with long-term value creation.
5. Lack of alignment: CEO Jean Martineau didn’t participate in the raise. His effective ownership is only ~2.3% (mostly via options), and he has repeatedly sold shares. Yet the board continues to back his direction — that should concern every shareholder.
6. Flawed “justifications” for capital raise: Mr. Martineau claimed the raise would “increase trading liquidity” and “boost market visibility.” Any CEO who genuinely believes this logic poses a risk to shareholder capital. Issuing shares below intrinsic value without financial necessity destroys value.
7. More dilution ahead: Mr. Martineau has already signaled that additional dilutive raises are on the horizon.
8. Conviction in action: iolite continues to buy shares in the open market — putting real capital behind its convictions.

3. A Misguided and Emotional Board

1. Baseless attacks: The board’s claims that iolite’s nominee, Mr. Leitz, lacks “industry knowledge, experience, professionalism, and sound judgment” are unfounded and borderline defamatory. The repeated personal attacks suggest desperation — not leadership.
   Robert Leitz is deeply invested in Dynacor’s success and brings 25 years of experience in finance and commodities. His expertise in international M&A and distressed debt investing, supported by an extensive global network, equips him to contribute effectively to the Company’s success. iolite holds a diverse portfolio of commodity-related investments across Australia, Canada, Switzerland, and Africa. Before founding iolite, Mr. Leitz held positions at Glencore and several financial institutions, including TPG Credit, Goldman Sachs’ European Special Situations Group, and KPMG Corporate Restructuring.
   
2. Disregard for shareholder voice: The board actually had a letter sent that stated that Mr. Leitz should be disqualified because his views differ from theirs. In other words, shareholder input is only welcome if it reinforces the current regime.
3. Lack of relevant expertise: The current management team lacks verifiable experience in M&A and international expansion — and has been slow to act, with markets like Senegal discussed for over five years and still no execution. This is a dangerous gap, especially with nearly US$100 million in cash now at risk of being misallocated.

4. Who is Actually Wasting Company Resources?

1. Misplaced aggression: The Meeting was called by iolite — not Mr. Leitz — in its capacity as Dynacor’s largest owner, in response to what iolite believes was an unnecessary, heavily discounted, and unfair capital raise, as well as serious governance concerns. Rather than engaging constructively, the Company chose to escalate, even filing a provisional injunction against both iolite and Mr. Leitz. That attempt failed in court.
2. Legal strategy to silence dissent: In its injunction, the Company attempted to deprive shareholders of their fundamental right to determine board composition — ignoring the basic principle that director elections, whether at an annual or special meeting, are a shareholder decision. The Company is now trying to get your backing to shirk its responsibilities for costs it created by calling for a resolution for iolite to bear the costs of the Meeting. Do not fall for it.

Let’s be clear: it was the entrenched board that refused to engage and aggressively resisted a modest, reasonable request from its largest shareholder — a single board seat out of nine. Rather than call the Meeting themselves as required by law, they chose to waste corporate resources on legal battles. The very costs they now complain about are of their own making. When a board reacts this defensively to such a limited request, shareholders must ask: what is this board so afraid of — and whose interests is it really serving?

Voting Process

At the Meeting, Shareholders will be asked (1) to vote on an ordinary resolution to set the number of directors of the Company at nine persons, (2) to vote on the election of Mr. Robert Leitz as director of the Company, (3) to vote on management’s proposal that iolite be responsible for costs associated with the Meeting, and (4) to transact such other business as may properly be brought before the Meeting or any adjournment thereof.

Shareholders are encouraged to vote FOR (1) and (2) in advance of the proxy cutoff of 10:00 AM (Eastern Time)‎ on April 14, 2025, in accordance with the instructions accompanying the form of proxy or voting instruction form mailed to Shareholders together with the Circular. Shareholders are also encouraged to attend the Meeting in person at 800 Victoria Square, Suite 3500, Montréal, QC, H3C 0B4.

Shareholders are encouraged to vote AGAINST (3) management’s proposal that iolite be responsible for costs associated with the Meeting. These costs were created solely by Dynacor’s actions in refusing to call the Meeting and taking actions to entrench itself and not be open to any other voices on the board. The board is trying to shirk its responsibilities under law, as it did when it refused to call the meeting or come to a solution where Mr. Leitz would be nominated for election.

Shareholders who do not receive a circular and proxy may contact us at proxy@endeavortrust.com. The circular with respect to the Meeting will be made available at www.sedar.com and at www.iolitecapital.com/dynacor.

Glass Lewis will host a Proxy Talk with iolite on April 9, 2025, at 2:00 p.m. ET. 
A link to the event is available on iolite’s dedicated website www.iolitecapital.com/dynacor.

About iolite

Founded in 2011 by Robert Leitz, iolite Capital is a Switzerland-based investment manager with a focus on hidden champions: good businesses at attractive valuations. iolite serves a select circle of private and institutional clients who share the same entrepreneurial mindset, are willing to invest for the long term, and who would like to have first-hand access to a dedicated portfolio manager with substantial and meaningful skin in the game. Using a private equity approach, iolite conducts deep fundamental research, constructively engages with management, and adopts a long-term investment horizon. For more information on iolite, please visit www.iolitecapital.com.

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