Emerita Resources (TSX-V: EMO) has sued Lithium Ionic (TSX-V: LTH) in Ontario, seeking an interest in the Brazilian lithium assets at the centre of a widening dispute that follows allegations former mining executives diverted project rights to create Lithium Ionic.
Emerita filed a statement of claim this week in the Ontario Superior Court of Justice seeking an equitable interest and constructive trust over the Bandeira project assets and certain Lithium Ionic securities held by former directors and officers.
The lawsuit follows April allegations by the Ontario Securities Commission (OSC) that former executives diverted rights to Emerita’s Falcon lithium project in Brazil to establish Lithium Ionic. The allegations have not been proven in court, and several executives and directors resigned from both companies after the OSC proceedings.
Lithium Ionic said the proceedings mainly concern former directors and officers of Emerita, Falcon Metals, Lithium Ionic and its Brazilian subsidiary, MGLIT Empreendimentos. It noted that none of its current directors or officers are named in the action and that it will vigorously defend its rights, assets and shareholders through the court process. The company added that, because the matter is before the courts, it will not comment further on the allegations.
Strategic asset
Emerita argues the Bandeira project incorporates mining claims originally designated under its Falcon project and is seeking an equitable interest in those assets. Lithium Ionic maintains it holds valid and registered title to the claims.
The case carries significant implications because Bandeira is central to Lithium Ionic’s strategy of becoming a near-term lithium producer.
The project is in the final stages of regulatory review and approval. A feasibility study completed last September outlined an 18.5-year mine life capable of producing 177,000 tonnes of spodumene concentrate annually, positioning the project as one of Brazil’s more advanced hard-rock lithium developments.
