Case Study: Mosquito Consolidated
Below is the opening of this case study from Laurel Hill:
On October 17, 2012, after what amounted to a nearly year long proxy battle, the shareholders of Mosquito Consolidated Gold Mines were ultimately able to have a say on the stewardship of their company. The prolonged battle - which involved an invalidated meeting, court proceedings and eventually a court-ordered meeting with an independent chair and tabulator- resulted in shareholders of Mosquito overwhelmingly electing a new slate of directors proposed by The Concerned Shareholders.
The board battle commenced in the fall of 2011, when two existing directors, Mr. Hongzue Fu and Mr. Shaun Dykes, without notice, were excluded from director nominations in the Management Information Circular. International Energy and Mineral Resources Investment Company Limited ("IEMR"), of which Mr. Fu is president, was the largest shareholder of Mosquito, representing at the time 16.20% of the outstanding shares. Shaun Dykes had been Exploration Manager for the company since 1994. Mr. Dykes had guided the flagship CuMo project from the beginning of exploration to where its sits today - a $16 billion asset based on the 2009 Preliminary Economic Analysis. In spite of such an asset, the market capitalization of the company languished at $30 million.