As a proxy war for control of Colorado Resources Ltd. looms, both sides in the battle, which pits an ex-president and CEO against some of his old colleagues, slung allegations of self-interest in managing the company.
Colorado Resources outlined a long list of allegations in a March 19 news release. Among other things, Colorado Resources' existing board alleged that ex-President and CEO Adam Travis worked against the interest of shareholders when he personally consolidated ownership of an exploration property called Gin next to the company's North ROK copper-gold property in British Columbia in 2013. At the time, he increased his ownership from 25% to 100%.
"What's even more shocking is that Travis later actively promoted the Gin property to other parties, without advising Colorado," the company said in its statement. "And then, after four years of trying to sell the property, Travis finally offered it to Colorado for shares, cash and a reimbursement of his expenses."
Colorado Resources initiated a civil claim against Travis and his company Cazador Resources Ltd. on March 15, alleging a breach of duties related to the Gin property.
Travis is leading a group of concerned shareholders that earlier in March launched a bid to replace Colorado Resources' board of directors at an upcoming annual general meeting scheduled for April 6.
In a March 19 interview, Travis defended the move to buy up Gin. He said colleagues at Colorado Resources knew what he was doing at the time, and he questioned why they were raising it now as an issue.
"There was nothing nefarious or secret at the time," he said, while also noting that he had long staked claims in the region.
A spokesperson for Colorado Resources could not be reached for comment by press time.
Colorado Resources also alleged that Travis used company resources as a "personal piggy bank" and directed work to family, including his son and daughters. Travis did not address those specific allegations in the interview but said he was "taken aback" and was still reviewing his response.
Travis also contended he was dismissed earlier in 2018, after years of heading up the company, when he and independent directors opposed a 2017 transaction that would have seen Colorado Resources option a copper-gold property to Damara Gold Corp., which, he noted, is backed by members of Colorado Resources' board of directors.
"My fellow board members didn't expect that decision of the independent directors," he said, referring to his and another board members' opposition to the deal. In part, Travis said he did not want to option out the property, as Colorado Resources had recently made discoveries in the area and also received financial backing from Goldcorp Inc.
Travis said members of the board of directors only began to allege that he had not acted in the company's best interest after he opposed the Damara Gold deal.