The proposed merger of Lytton Minerals (LTL-T) and sister company New Indigo Resources (BDR-A) has been derailed following recent disclosures of the ownership of voting shares.
The merger was to have been considered at special and annual general shareholders’ meetings on June 29. However, on June 25, it was announced that the Crabbe Huson Group of Portland, Ore., had acquired a 25.9% interest in Lytton and that one of its principals, James Crabbe, had acquired about 20% of New Indigo.
Because these disclosures represented material changes to the information circulars, the June 29 meeting was cancelled.
In a June 30 release, Lytton and New Indigo state: “The companies have brought the acquisition of shares in New Indigo and Lytton by Crabbe Huson and Mr. Crabbe to the attention of certain securities regulatory bodies.” Meanwhile, legal proceedings have been launched against the two companies by two parties claiming to be shareholders — the Fern Trust and Howard B.
Millar. Other defendants named in the June 26 statement of claim include Glenmore Highlands (GMH-A), Klondike Gold (KG-V), Finngold Resources, Harry Dobson, Desmond Alexander, David Whittle and Montreal Trust.
According to the Lytton-New Indigo press release, the statement of claim alleges, “that certain past actions of the companies were oppressive to [the plaintiffs] as shareholders, and [they] are seeking damages in that regard.
The plaintiffs also allege that three persons who were formerly directors of Lytton and New Indigo, one of whom remains a director of Lytton, breached certain duties that the plaintiffs claim were owed to them. The companies intend to defend the actions.”
Exercising understatement, mining analyst David James of Canaccord Capital says the lawsuit against Lytton does not help the company’s turnaround. In Canaccord’s Daily Letter, he writes: “We believe the company has about $2 million in the treasury and has mobilized field crews to the Northwest Territories [where Lytton and New Indigo are exploring jointly for kimberlite targets], but funding projects for a concerted drill program has not been facilitated by these developments.”
Nonetheless, exploration is continuing apace at the Jericho joint venture, north of Lac de Gras in the Northwest Territories, where field crews have been mobilized to begin investigating 84 targets selected from the evaluation of airborne electromagnetic surveys, kimberlite indicator mineral dispersion train analysis, structural interpretation and compilation of previous exploration data. The field program will consist of prospecting, mapping and sampling, to be followed by ground geophysics and, if warranted, drilling.
A 30-tonne sample from the JD-03 kimberlite is being processed at a dense-media-separation plant in Vancouver; results are expected in August.