A $30 million out-of-court settlement awarded to a junior exploration company in 2011 in compensation for the de facto expropriation of mineral claims that resulted from a uranium mining moratorium still hasn’t been fully paid out, but not because of any foot-dragging on the province’s part.
Boss Power Corp. (TSX:BPU) shareholders have been bitterly divided over the question of how much the uranium claims are worth, which has held up most of the money from being paid out to shareholders.
The money is held in trust, and according to one company official, only about $6.1 million has been paid out to date.
On Friday, November 21, the company announced it had finally struck a tentative an agreement with one of the key shareholders, Anthony Beruschi, and his associated companies, Morning Star Resources Ltd., and Magic Dragon Ventures Ltd.
In 2008, the province placed a ban on uranium and thorium exploration and extraction, leaving companies like Boss Power with claims that were worthless, at least for uranium mining.
Boss Power took the province to court, arguing the moratorium was tantamount to expropriation. The B.C. government ended up settling out of court in 2011, awarding Boss Power $30 million.
The full amount has yet to be paid out, however, as Boss Power and Beruschi, whom Boss Power has referred to as a “dissident shareholder,” have been in a bitter dispute over the worth of the claims.
Before the money can be fully paid out, all the related claims had to be handed back to the province. At the heart of the dispute is the so-called B claim.
According to Beruschi, Boss Power included the B claim in its settlement with the B.C. government. Beruschi claimed in a press release in September 2013 that the B claim does not belong to Boss Power, but to Beruschi.
Boss Power and Beruschi disagreed on how much the claims were worth. According to one report, Boss offered $1.55 million, but Beruschi insisted they were worth $4 million.
On Friday, Boss Power and Beruschi jointly announced they had reached an agreement.
Under the arrangement, a new holding company, Blizzard Finance Corp., (referred to as Newco), will be set up to facilitate the division of assets and shares.
If approved by shareholders, under the arrangement, Beruschi and other Boss Power common shareholders can vote to receive cash in the amount of $0.33 per share in Newco.
Those shareholders who do not agree can retain their Boss Power shares, with their primary asset being whatever the balance of the $30 million settlement from the province is.
Boss Power’s shares were trading today at $0.25 per share.
Boss Power's board of directors are recommending shareholders vote in favour of the arrangement, saying that it will “extract Boss Power from what would otherwise be years of litigation, and allows the contingent of dissenting Boss Power shareholders to be spun-out into Newco.”
A shareholder vote is to be held in January 2015.
@nbennett_biv
