TORONTO, ONTARIO--(Marketwire - Jan. 27, 2011) - Inspiration Mining Corporation ("Inspiration" or the "Corporation") (TSX:ISM)(FRANKFURT:OI8) responded today to the January 26 press release issued by Ursa Major Minerals Incorporated ("Ursa") announcing a proposed private placement of $2,580,000. Based on publicly available information, Ursa has 66,007,534 issued shares and the proposed private placement if completed would result in the issue of 13,500,000 shares and 3,945,000 warrants and broker warrants.
Inspiration owns 13,000,000 shares or 19.7% of Ursa's current issued and outstanding shares and requisitioned a meeting of shareholders of Ursa on November 1, 2010 to elect a new slate of directors. Pursuant to Inspiration's requisition, Ursa has called a meeting of shareholders for March 3 with a record date for voting of February 1.
Ursa has been very secretive about the Inspiration requisition by not issuing any press release stating that Inspiration requisitioned the meeting or that it is for the purpose of removing the current directors of Ursa. Indeed the first time Ursa mentions the need for a shareholders meeting is nearly three months after receiving the requisition and at the bottom of its January 26 press release announcing the proposed private placement by stating:
What URSA has failed to state is that the request is in fact a requisition by Inspiration, its largest shareholder, to remove the Ursa directors and elect a new slate of Ursa directors. There is no public disclosure anywhere by Ursa that its largest shareholder is seeking to remove the current Ursa directors.
It is plainly obvious that the proposed private placement is designed by management and the directors of Ursa to entrench themselves by securing friendly votes from the private placement investors in the upcoming shareholders meeting. Inspiration believes that closing an Ursa private placement on or before the February 1 record date would be a breach of the fiduciary obligation of management and the directors and would represent oppressive conduct towards all Ursa shareholders including Inspiration.
In particular, the proposed issuance of 13,500,000 shares and 3,945,000 warrants and broker warrants has been designed to nullify the share voting power of Inspiration which owns 13,000,000 Ursa shares. If the private placement is completed, there would be a material effect on control of Ursa because the new investors would own 17% of the issued Ursa shares and the 19.7% ownership position of Inspiration would drop to 16.4% or lower.
The proposed issuance of 13,500,000 shares and 3,000,000 warrants represents in the aggregate 25% of the currently issued shares, which is the maximum number of shares that may be issued without shareholder approval under the rules of the Toronto Stock Exchange.
Randy Miller, the Chief Executive Officer of Inspiration, stated: "The proposed private placement is unquestionably tied to maintaining control of Ursa by placing the maximum shares possible in the hands of friendly investors right before the record date for the Ursa shareholders meeting called to remove the Ursa directors."
Inspiration intends to take all appropriate action against Ursa, its management and directors for their oppressive conduct in connection with the proposed private placement.