The writ involves a trading halt in Skyrocket’s stock initiated on Oct 3 and lifted Nov 23. The VSE halted the stock over dissemination of drilling results from its Boy claim near Kamloops, B.C.
This drilling program was the subject of several news releases from Skyrocket, the price of which had moved from 10 cents in mid-August to 65 cents before pulling back to 40 cents at the end of August. An Aug 28 release tied the upward price movement in Skyrocket’s stock to drill core from the first hole showing malachite in fractures, native copper as well as sections of silver.
On Aug 30, the company reported that Teck Corp. (TSE) was examining the core and that the hole had been deepened to 1,250 ft from 1,000 ft. Six days later, Sept 5, the company reported that a second drill hole had reached a depth of over 1,000 ft and that the core was “the best that Skyrocket had ever seen and far beyond our wildest dreams and greatest expectations.”
In the following release of Sept 7, the company speculates that it had hit values in palladium, copper, silver and gold. It reported to have contacted a palladium specialist to log the core and that they had hired a guard to protect the drill core. In a Sept 19 release, the company said it had contacted Nevin Sadlier- Brown Goodbrand to ensure quality control on core logging and assaying.
Skyrocket announced on Sept 25 that it had offered Parallax Development (VSE) the right to earn a 40% interest in the Boy claims in return for $200,000 in exploration expenditures. By the end of September, the stock had fallen to the 20-25 cents level.
On Oct 3 the VSE halted the stock stipulating that trading would not be reinstated until the company completed logging, assaying, and public reporting of results from its drilling program on the Boy claims near Kamloops.
Skyrocket’s response at the time was that it had not completed the work because of lack of funds. However, the exchange felt that in light of the positive news releases that it was in the public’s best interest to suspend trading in the company until results were disseminated.
The VSE reinstated trading in the company on Nov 23, saying that the current board was not acceptable and that the company would be delisted unless it put in place a board acceptable to the exchange by the end of December. Skyrocket President Arne Sanders noted that he does not intend to change the board of directors and will be seeking $230,000 in damages from the exchange. The damages stem from a private placement the company believes was not completed because of the halt.
Sanders thought that the VSE had acted beyond its rights issuing the halt. He said Skyrocket, or any other company, is not required to release drilling results until one year after they have been filed with the chief gold commissioner in Victoria.
He said that the premature release of the assays would adversely affect the company’s negotiations to option adjoining properties in the area.
Sanders said he had assayed a number of 1-foot sections in order to “reassure his own conscience” although he indicated he was not particularly happy with the results.
He also said that he plans to assay sections of the core which he described as a fine-grained mineral intrusive with high copper values. A small induced polarization survey followed by one hole over the survey’s high signature would lead him to a deposit he described as containing 50 million tons of $60 rock. He quickly pointed out that this figure was not yet in a proven category.
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