Executives at Canadian minerals explorer Emerita Resources Corp. have been accused by Ontario’s securities regulator of diverting the firm’s lithium project rights to a new company they controlled.
The Ontario Securities Commission alleges the group established Lithium Ionic Corp. to pursue mining claims from Emerita’s Falcon project in Brazil, conduct that defrauded Emerita and its investors, according to a Friday statement from the regulator.
Shares of Emerita fell as much as 38% in Toronto to their lowest level in nearly five years after the release, while Lithium Ionic plunged as much as 45%. Both Toronto-based companies are penny stocks, with market values below C$175 million ($126 million).
The regulator alleges Emerita chief executive officer David Gower, chairman Michael Lawrence Guy, chief financial officer Gregory Duras and corporate secretary Sergio Damian Lopez caused Emerita to say it had “relinquished” the Falcon project, which was misleading, while senior insiders were actually pursuing the project through Lithium Ionic.
Further, Gower and Hélio Diniz, a director with Lithium Ionic, misled the OSC during the investigation regarding the project, the regulator alleged.
The OSC’s allegations also encompass a high-grade zinc project in Spain called Plaza Norte.
The regulator claims that Gower, Lopez, Duras and Emerita president Joaquin Merino-Marquez approved untrue or misleading statements about Plaza Norte in public filings from 2017 to 2023. Those statements concerned Emerita’s permit status and ownership interest in the joint venture behind the development.
Lithium Ionic didn’t immediately provide comment. Emerita said in its own statement late Thursday that it has established a special committee to review and respond to the OSC allegations, which it describes as “unproven.”
“Plaza Norte and Falcon are legacy projects and are not related to the company’s current core business and operations,” Emerita said. “Both projects were previously assessed as having no relevance to the company’s go-forward strategy.”
The company did not immediately respond to an email requesting further comment on behalf of the individuals named.
A hearing is scheduled for May 8 in Toronto.
(By Sybilla Gross)
