Toronto-based hedge fund firm Waratah Capital Advisors has called for the removal of three directors at Lithium Ionic, as regulatory proceedings in Ontario cast a shadow over the company’s governance, according to a report by Bloomberg.
Waratah, which is the company’s largest shareholder, said the immediate resignation of David Gower, Lawrence Guy and Hélio Diniz would be in shareholders’ best interests following enforcement action initiated by the Ontario Securities Commission (OSC).
The regulator has alleged that the three individuals were involved in the transfer of mining rights tied to a Brazilian lithium project from Emerita Resources to Lithium Ionic — a company they subsequently helped establish and now serve as directors. Gower and Guy currently hold senior leadership roles at Emerita.
Waratah noted that it is not pre-judging the outcome of the OSC’s investigation but argued that board changes are warranted given the situation.
Lithium Ionic pushed back on the allegations, stating that its ownership of the Falcon Project claims is supported by independent verification and official records from Brazil’s national mining authority. The company also highlighted that it is not a subject of the OSC’s enforcement action and that no regulatory measures have been sought against it.
Shares in Lithium Ionic moved sharply higher in early trading in Toronto following the developments, despite the governance overhang. The company remains a small-cap exploration play, with a market capitalisation of roughly CAD179m.
Waratah, which is the company’s largest shareholder, said the immediate resignation of David Gower, Lawrence Guy and Hélio Diniz would be in shareholders’ best interests following enforcement action initiated by the Ontario Securities Commission (OSC).
The regulator has alleged that the three individuals were involved in the transfer of mining rights tied to a Brazilian lithium project from Emerita Resources to Lithium Ionic — a company they subsequently helped establish and now serve as directors. Gower and Guy currently hold senior leadership roles at Emerita.
Waratah noted that it is not pre-judging the outcome of the OSC’s investigation but argued that board changes are warranted given the situation.
Lithium Ionic pushed back on the allegations, stating that its ownership of the Falcon Project claims is supported by independent verification and official records from Brazil’s national mining authority. The company also highlighted that it is not a subject of the OSC’s enforcement action and that no regulatory measures have been sought against it.
Shares in Lithium Ionic moved sharply higher in early trading in Toronto following the developments, despite the governance overhang. The company remains a small-cap exploration play, with a market capitalisation of roughly CAD179m.
