Vancouver’s Mala Noche Resources Corp.’s proposed $500-million acquisition of a Mexican mine could be in question after a Toronto-based miner accused it of facilitating breaches of fiduciary duty during negotiations for the mine.
Mala Noche (TSX-V:MLA) said Friday morning it had received a letter from Toronto’s Alamos Gold Inc. alleging that, Eduardo Luna, who is a Mala Noche director and was a director of Alamos until June 7, breached his fiduciary duties to Alamos during the deal’s negotiations and that Mala Noche participated in and facilitated those breaches.
Mala Noche announced the proposed acquisition of the San Dimas gold-silver mine from Vancouver’s Goldcorp Inc. (TSX:G) on June 2.
Alamos said in its letter that it believes Luna and Mala Noche are liable to account to Alamos for any profits or benefits derived from the San Dimas mine and that the mine should be held in trust for Alamos.
Mala Noche is refuting the allegations and noted in a release that the Alamos’ letter did not suggest San Dimas was ever an actual acquisition target for Alamos. Wade Nesmith said that, as Mala Noche’s CEO, he approached Goldcorp about the prospect of Mala Noche buying the mine.
“It was my idea, pursued by me on behalf of Mala Noche and at no time did Mr. Luna have the opportunity to pursue the transaction with any other company.”
Negotiations were long and complex, he said, taking more than two years to complete.
Mala Noche said it is discussing the allegations with counsel.
Goldcorp is to receive $275 million in cash, $175 million of Mala Noche common shares valued at the offering price of Mala Noche’s proposed equity financing and a $50 million promissory note payable over five years bearing 6% interest. The deal, if completed, will be the second large divestment that Goldcorp has announced in recent months and is expected to close July 30.
Goldcorp is profiled in next week’s print edition of BIV as part of the Top 100 public companies in B.C. list feature section. Goldcorp was ranked 4th.