BGM Facing Renewed Action by Harbour...
Barkerville facing renewed court action from Harbour
2013-04-10 13:52 ET - Street Wire
by Mike Caswell
Barkerville Gold Mines Ltd. shareholder Rex Harbour says he is concerned the company will not allow one of his director nominees, Andrew Gustajtis, to be a candidate at its upcoming annual general meeting. Mr. Harbour, who controls 7.1 per cent of the company's shares, has filed an application in the Supreme Court of British Columbia asking that the courts instruct Barkerville to allow Mr. Gustajtis to be a candidate. He claims there is no clear reason to disallow him.
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| BARKERVILLE GOLD MINES |
| Frank Callaghan |
Mr. Harbour's request is contained in a court application he filed on April 5, less than two weeks before Barkerville's April 16 annual general meeting. He says that on March 13 he proposed Mr. Gustajtis and another man, Michael Steele, for election at the meeting. The company, however, only included Mr. Steele's name in its proxy materials, and not that of Mr. Gustajtis.
There was no explanation for the omission, according to Mr. Harbour. Barkerville's president, Frank Callaghan, only said that the notification did not comply with the company's advance notice policy. "No explanation is given by Mr. Callaghan ... as to why Mr. Steele has been put forward as a candidate, but not Mr. Gustajtis," the application reads.
Mr. Harbour is asking that the courts declare Mr. Gustajtis to be a candidate for election.
Meeting date dispute
The dispute over nominees comes three months after Mr. Harbour and Barkerville settled a court case over the date for the AGM. In a Nov. 30, 2012, petition, Mr. Harbour complained that the company's AGM was long overdue, the last one having been held on Aug. 26, 2011. He said that a meeting was necessary, as the company was in a precarious financial condition.
He also said he had lost confidence in Mr. Callaghan's ability to run the company. Among other things, he complained that Mr. Callaghan was responsible for a cease trade order that the B.C. Securities Commission imposed on Barkerville on Aug. 14, 2012. The order came after the company claimed to have 10.6 million ounces of gold, indicated, at its Cow Mountain property, plus up to 90 million ounces in the same trend. The figures, if correct, would make the discovery one of the largest gold finds in mining history.
The problem, as described in the petition, was that the company could not back up the figures. Barkerville filed a technical report on Aug. 13, 2012, and the next day the BCSC suspended the company. The regulator said that the report did not support the resource estimate from Cow Mountain.
Mr. Harbour claimed that he had a group of investors, headed by former Kinross president Peter Tomsett, who would refinance Barkerville. They would also take the steps necessary to have the cease trade revoked. To secure the financing, the company would have had to appoint Mr. Tomsett and two others to its five-member board, the petition stated.
Barkerville, for its part, contended that there was no urgent need to hold the meeting. In a Dec. 31, 2012, response, the company claimed it had no immediate cash shortage, and said holding the AGM would not result in the BCSC lifting the cease trade. Mr. Harbour would have the opportunity to put forward a full slate of directors when the company called the AGM.
Mr. Harbour and Barkerville ultimately settled that dispute out of court. They agreed that Barkerville would hold the meeting on April 16 and that an independent director would serve as the chair. Shareholders would vote on Mr. Harbour's proposed financing at the meeting, and Mr. Harbour would put forward a full slate of directors.
Ultimately that is not what occurred. Mr. Harbour's financing did not go ahead, and he decided not to put forward a full slate of directors. Instead he only nominated Mr. Steele and Mr. Gustajtis to the board.
Mr. Harbour's application is set to go before a judge on Thursday, April 11.
Mr. Harbour is represented by Vancouver lawyer Scott Turner. Barkerville is represented by Mark Skwarok of McMillan LLP.
The stock last traded on Aug. 13, 2012, at $1.22.