Altaley Mining Corporation (TSX-V:ATLY) said that its name will change to Luca Mining Corp from the opening of trading on Tuesday, March 21, 2023, and it will trade under the symbol LUCA on both the TSX Venture and OTCQX exchanges.
Altaley also said Ralph Shearing will retire from his role as president of the company, and be replaced by Ramon Perez effective March 27, 2023, adding that Shearing will remain as a director of Altaley.
Perez is a senior executive and corporate director with over 15 years of experience in the mineral resource sector and his work has focused on M&A and business development strategies supporting corporate growth. He is currently portfolio manager to Calu Opportunity Fund, LP a natural resource-focused fund. Perez previously served as director & president of Candelaria Mining Corp, a Mexican advanced exploration company; was a founding member of Sociedad Minera Reliquias SA, a Peruvian publicly listed company.
He also acted as a consultant to Ecuadorian gold producer, Core Gold Inc, during its acquisition by Titan Minerals. Prior to these roles, Perez spent 10 years as vice president of Carrelton Asset Management, a private equity firm investing in the natural resource sector. He holds an MBA in International Business from the University of Miami.
READ: Altaley Mining announces proposed name change to Luca Mining
"On behalf of the board and the company, I want to thank Ralph for his tireless dedication to retaining and developing the Company’s assets, in particular the Tahuehueto Gold Project, which from its inception Ralph recognized was a world-class gold deposit,” Mike Struthers, Altaley CEO, said in a statement.
“His determination has provided the Company with the opportunity now to finally deliver this project as a new and profitable mining operation. I also want to give a special welcome to Ramon Perez to the team. Ramon brings a wealth of experience in corporate finance and company management and he'll provide invaluable support to the team as we focus on achieving our goals for 2023 and beyond," he added.
The company also announced the resignation of CFO Erick Underwood for personal reasons, and the re-appointment of Omar Abrego as interim CFO, until a permanent replacement is found.
The company also said that shareholders approved all the resolutions put forward at its 2023 Annual General Meeting held on March 14, 2023.
These included:
- the company’s 2023 Omnibus Equity Incentive Plan,
- the creation of Calu Opportunity Fund, LP as the new “Control Person” of the company
- the repricing of 1,076,042 outstanding incentive stock options to an exercise price of $0.50 per share
- the appointment of Grant Thornton LLP as the Company’s auditors for the ensuing year, fixing the number of directors for the ensuing year at seven
- The election of Mike Struthers (CEO), David Rhodes (chairman of the board), Ralph Shearing (current president and corporate secretary), Roberto Guzman Garcia, Ruben Alvidrez Ortega, Mark H. Bailey and Rory S. Godinho as directors of the company.
The company added that former directors Natascha Kiernan and Tom Kelly did not stand for re-election. All directors elected other than Godinho were standing directors of Altaley.
Godinho was previously a director of Altaley and is a veteran securities lawyer and currently the co-chair of Cozen O’Connor LLP’s Canadian Capital Markets and Securities Group. He was a former chairperson of the TSX Venture Exchange’s National Advisory Committee and was subsequently appointed by participating provincial and the Canadian Federal governments and served until May 2021, when it was wound down, as a director of the Capital Markets Authority Implementation Organization.
“Mr Godinho brings a wealth of capital markets, corporate governance and M&A experience as well as a strong network to the Company and we are thrilled to have him rejoin the Board of Directors” said David Rhodes, chairman of the Altaley board.
Review of Contingent Liabilities
Ataley also noted that its new management undertook a comprehensive assessment of its balance sheet specifically with regard to the significant provision made in the accounts for contingent liabilities in Mexico. The company intends to aggressively resolve and hopefully substantially reduce or eliminate the contingent liabilities.
Most of the lawsuits are ongoing legal processes without any specific material outcomes as yet but the company provided an update on an action brought by Size Solutions SA de CV.
In 2019, Minas de Campo Morado, SA de CV (MCM), a subsidiary of Altaley, signed an agreement with Size to provide payroll and accounting services to the company’s Mexican subsidiaries. The company suspended mining operations at Campo Morado in 2019 due to market conditions, placing the mine into six months of care and maintenance. As a result, the company no longer generated revenues and was unable to pay the amount due to Size.
In January 2020, the company executed a Debt Acknowledgement Agreement in favor of Size to recognize this debt for amounts then outstanding of 62,711,826.80 Mexican pesos. The amount related to employee wages, government withholding taxes, employee benefits, consulting services, interest, and other miscellaneous services.
In March 2020, after resuming mining operations at Campo Morado, the company terminated its business relationship with Size and hired most of the Size employees previously seconded to the company, directly employing them in the company’s respective Mexican subsidiaries.
“Subsequently, Size abandoned its lease obligations, failing to pay office lease rentals of approximately $2.6 million Mexican pesos, failed to pay the former employees' payroll obligation, and failed to pay government withholdings for those employees previously seconded to Altaley’s Mexican subsidiaries,” the company said.
During 2020 and 2021 the company paid approximately 20 million Mexican pesos on behalf of and towards Size’s payroll obligation. The payments amounted to most of the outstanding Size obligations related to the former Size employees seconded to the company.
The company later received notice from Size claiming outstanding amounts, as of December 31, 2019, which did not recognize the subsequent payments made to Size or Size’s abandoned lease obligations.
In its December 31, 2021, financial statements, the company accrued C$3,200,000 (52.3 million Mexican pesos) as a contingent accrued liability in accounts payable in respect to the debt obligation to Size. Altaley is disputing the difference sought by Size.
After a series of legal proceedings, on 21 October 2022 a local district issued a judgement in favor of Size to recover the Debt Settlement Amount. However, Mexican legal counsel are of the opinion that the Lower Court made several errors in their judgement, and Altaley’s subsidiary has lodged appeals against the Lower Court’s ruling, elevating the dispute to the next level in a federal court.
The company said it will provide further information on the status of the proceedings as and when it becomes available.
The company also said that it is defending itself against a number of other legal disputes on various historical issues through its subsidiaries in Mexico, adding that provisions for these are included in the accrued potential liabilities in the financial statements.
Altaley Mining is a Canadian-based mining company with two 100% owned Mexican gold, silver, and base metal mining projects.
Contact the author at jon.hopkins@proactiveinvestors.com