"Suspend" David Gower As CEO of Emerita Resources for Fiduciary Malfeasance

"Suspend" David Gower As CEO of Emerita Resources for Fiduciary Malfeasance

Started
September 15, 2022
Petition to
Ontario Securities Commission (1-877-785-1555)
Signatures: 36Next Goal: 50
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Why this petition matters

Started by John C

...and by 'suspend' we mean FIRE and PROSECUTE for securities law violations!

*First: a legal disclaimer. Given that powerful and well funded legal teams are behind this individual, it needs to be said this is a PROTECTED OPINION under free speech laws. Do your own due diligence and do not simply believe stories told on the internet.*

For those not familiar with the story, as is so often the case in Canadian Junior Mining, David Gower, the CEO of Emerita Resources and other insiders decided to manipulate through crafty lawyers a means to enrich himself at the expense of shareholders. This is a case of blatant fiduciary mismanagement, and expropriation of an asset from the company for self enrichment that we want investigated.

As CEO of Emerita Resources, David Gower oversaw the dropping of a critical land package situated next to Sigma Lithium (2.7b market cap) in Brazil for nothing. NOTHING! That land package was turned into Lithium Ionic (150m market cap), where he is now a director, and guess what? David Gower and 2 insiders got 17million shares at 0.00000001 per share company! Not a bad deal! 

Recently, Lithium Ionic's market cap has even eclipsed that of Emerita Resources. Does that seem fair given that the land package originated FROM Emerita Resources and should have REMAINED as an asset on THEIR books?

During this years AGM held in July 2022, David Gower claimed that 'Emerita never owned the land package'. This despite Emerita issuing a news release that 'Emerita Resources Corp has exercised its option and acquired a 100% interest in the Falcon Litio MG Project'. You can see the news release here on their OWN website: https://www.emeritaresources.com/news-and-media/news-releases/emerita-completes-acquisition-of-the-falcon-litio-mg-project-brazil
If by the time you are reading this Emerita has taken it down, it is also available here or elsewhere on the web:
https://www.globenewswire.com/fr/news-release/2018/09/12/1569659/0/en/Emerita-Completes-Acquisition-of-the-Falcon-Litio-MG-Project-Brazil.html

What does 'completes acquisition' mean to you? Apparently to David Gower, it means Emerita does NOT own the asset. Would it not then be considered fraud to put out a false statement like that which can materially move the share price? Absolutely.

And if the land package WAS in fact owned like the news release says (which happens to be the truth), then shareholders are owed an explanation AND compensation for the team dropping the land package for nothing.

The other claim that David Gower has used in the past, which is that there was no way to know where lithium price was headed, or if the land package had any value, is also bogus. Blake Hylands, CEO of Lithium Ionic was interviewed in June 2022 where he clearly outlined that the team KNEW the value of the land package IN ADVANCE: " Like I said earlier, the reason we even have this ground, is that six years ago they recognized that this was a unique opportunity to pick up ground on lithium, which was not really in vogue the way it is now, and be able to hold that understanding where the world was going." https://themarketherald.ca/a-ground-floor-lithium-opportunity-in-a-prolific-lithium-district-2022-06-02/

And if the land package WAS in fact not valuable, why did David Gower and other team members gift themselves shares? If David had dropped the land package, and it was picked up by another entity he wasn't involved with, current Emerita shareholders would be disappointed but not angry. It would have been just a mistake in judgement - with shareholders understanding the company's focus should be on their Spanish assets. However, that wasn't what happened, and Emerita shareholders are LIVID because you DON'T get to claim a land package is not valuable, drop it, and then give it to YOURSELF later. That is the antithesis of the CEO's main duties of fidiciary responsibility and maximizing shareholder value - it is THEFT.

The way to treat it, should of been to spin it off instead of Gower and others taking 25 million free shares, with EMO shareholders getting some of those. Not all, but a decent portion to properly account for Emerita's costs of ownership. That's FAIR. But David Gower isn't interested in that. David Gower wasn't interested in making a GOOD amount of money and being equitable with shareholders - he wanted to make MORE and guarantee himself a free win. We speculate that David didn't realise how quickly lithium prices were going to run up, and perhaps thought it would take a few years by the time this information was discovered. By which point, it would be mostly forgotten/overlooked and Emerita shareholders would have theoretically been sufficiently satisfied with returns on their great Spanish assets. Unfortunately for him, he's been caught red-handed committing securities fraud and brazen fiduciary mismanagement.

An additional excuse David Gower has fallen back on and promoted through interviews is the supposed 'taxes owed' excuse that the government was taking the land package back.  Typically an entity would just release the tenement (so they didn't have to pay for it anymore) but they actually divested the company they owned that owned it (MGLIT) so that Helio Diniz (president, Lithium Ionic) got 100% ownership. Additionally, in the filing statement for LTH as the subscribers over the last year since they incorporated (~20mil total capital raised) paid outstanding debts, renewed the property and paid the directors. The excuse doesn't make sense even if tax bill was millions of dollars because clearly they raised enough to cover it, and they could of raised the exact same amount with a reverse IPO spin-out from Emerita. 

The timing is also damning. Here is the sequence: The full corporate name of Lithium Ionic, and the full name under which it currently exists and carries its business is “Lithium Ionic Inc.” Lithium Ionic was incorporated under the OBCA on July 5, 2021 under the name “LI-Ionic Inc.”, which was subsequently changed to its current name on November 17, 2021. Lithium Ionic’s registered office and principal place of business is located at 36 Lombard Street, Floor 4, Toronto, Ontario, M5C 2X3 - the same address as Emerita Resources! Lithium Ionic is canadian and when it got the subsidiary it was the same one. Helio Diniz then novated the company into the main company. No new entity was even created!

Every EMO shareholder got 0 dollars for an asset that was divested in 2021 and acquired 1 month after we dropped it. Lithium Ionic has 3 directors in common and the same guy who owned 1 share of 1000 in the property when we had it now owns 8.5million shares worth around that much. He paid a total of 227 Canadian for the tenement.

So why a petition and not simply vote him out as CEO? Well, David Gower was smart. He cut in all of Emerita's largest shareholders including Eric Sprott, the fake self-proclaimed 'doctor', the lambo huckster and others into the massively discounted early round financing for Lithium Ionic. That way, they wouldn't complain that it had been stolen out from under them! Do you think they're going to vote against him being CEO of Emerita when he lined their pockets with a great asset at the expense of all the other shareholders? NOPE.

We have the questions below that we DEMAND David Gower and other culpable insiders (Lawrence Guy, Greg Duras, Damian Lopez,  Helio Diniz) be made to answer. We also DEMAND a full investigation by the OSC (Ontario Securities Commission) or other regulatory bodies, local law enforcement and prosecutors into criminal wrongdoing.

1. Why did Emerita not spinoff the lithium property to Emerita shareholders? 
2. Emerita directors hold 25 million in shares of Lithium Ionic and Emerita shareholders paid a minimum 300k in dilution for the property - is there a plan for Emerita shareholders to be compensated for this? 
3. Why was Lithium Ionic created by Gower and Helio Diniz 2 months prior to Emerita letting it go?
4. Why didn't lithium ionic state that Emerita owned the property for 5 years from 2016 to 2021? 
5. Why did Gower, and 2 insiders get 17million shares at 0.00000001 per share in the new lithium ionic company 2 months prior to even having a property?

Chat about your concerns regarding the company:

Gabe Friedman Staff Writer, Host of Down to Business Podcast Financial Post 647.457.6338 gfriedman@postmedia.com

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Signatures: 36Next Goal: 50
Support now