GreenBank Capital Inc. asked the TSX-V to delay the approval of Minfocus Exploration Corp.'s attempt to sell shares to insider and affiliate Francis Manns, calling the move by Minfocus' directors "irresponsible."
A 19.62% shareholder in Minfocus, GreenBank claimed that the transaction was a scheme by Minfocus directors to retain their positions in the board. GreenBank had wanted to remove all of Minfocus' current directors by requisitioning for a shareholder meeting which Minfocus earlier refused.
In a July 27 release, GreenBank said Minfocus has increased the amount they intend to pay for Manns' interest in the New Coral zinc project, from 7.5 million shares and 7.5 million warrants to 50,260,000 shares and 50,260,000 warrants. Minfocus has a 56% interest in the project.
The new proposal will raise Manns' share capital by 131%, up from 76,920,000 shares to 177,440,000 shares, and will result in the creation of a new control person which requires disinterested shareholder approval. GreenBank added that the transaction may lead to a reverse takeover which also needs shareholder approval.
Greenbank said that Manns' proposed acquisition is not a commercial transaction and may possibly be a breach of fiduciary duty as Minfocus, which has to spend C$394,500 for that deal, will likely default on its option commitment on New Coral and fail to spend C$550,000 in exploration expenditures by Sept. 30.
Apart from that, GreenBank said that Minfocus directors have proposed a private placement of 70 million units, or a 91% increase in issued share capital, through a mixture of non-flow through and flow through shares and warrants at a price of 0.7857 cent and 0.857 cent apiece, respectively.
GreenBank said it has requested the TSX-V to delay approval of these transactions and not allow any share issuances until after the Minfocus shareholders meeting set on Sept. 7.
Meanwhile, GreenBank said that it will vote at the shareholders meeting for the three new directors former Minfocus CEO Gerald Harper has nominated.