Nevada Copper denies wrongdoing in Mercator share case
2012-11-26 13:44 ET - Street Wire
See Street Wire (C-NCU) Nevada Copper Corp
by Mike Caswell
Nevada Copper Corp. denies that it did anything wrong when it acquired 46 million shares of Mercator Minerals Ltd. The company is responding to a lawsuit in which Mercator claimed that Nevada Copper violated a confidentiality agreement in buying the shares. In its response, Nevada Copper says the confidentiality agreement no longer applied by the time it acquired the stock.
The dispute between the companies began on Nov. 13, 2012, when Mercator Minerals filed a notice of claim in the Supreme Court of British Columbia against Nevada Copper. The suit claimed that Nevada Copper had signed a confidentiality agreement on May 18, 2012, in which it agreed that it would not acquire more than 10 per cent of Mercator's shares. The companies were negotiating a "possible transaction" at the time.
Several months later, on Oct. 9, 2012, Nevada Copper acquired 46 million Mercator shares, in violation of the confidentiality agreement, the suit claimed. The stock, which Nevada Copper purchased in an off-market deal, represented 17.6 per cent of Mercator's outstanding shares.
Mercator sought a court order restraining Nevada Copper from voting the stock and from acquiring any more Mercator shares.
Nevada Copper, in a brief response to the suit, agrees that there was a confidentiality agreement. It disputes, however, that the agreement still applied when it acquired the shares. Although the agreement was originally set to run for two years, portions of it would cease to apply if somebody were to make an offer for more than 20 per cent of Mercator.
As Nevada Copper sees it, a $25-million financing that Mercator arranged on Oct. 1 constituted such an offer. Mercator issued 55,775,000 shares in the financing, or 21.53 per cent of the then-issued stock. Given that Nevada Copper acquired its shares about a week after the financing announcement, the confidentiality agreement no longer applied, the response states.
Nevada Copper asks that the suit be dismissed, with costs. Vancouver lawyer Stephen Schachter filed the response on the company's behalf.