This Canadian mining company is sitting on billions worth of potash. Inside the battle that has angry shareholders alleging vote rigging and stock sabotage

Down the hall they marched and into the conference room at the Hampton Inn near Saskatoon’s airport, four armed city police officers acting as a security detail for the board of directors of a small Saskatchewan mining company called Karnalyte Resources Inc.

The dissident shareholders have one clear target for their anger — a foreign government-owned company that has become Karnalyte’s largest minority shareholder. It’s not exactly a David vs. Goliath fight — more like David vs. a small company that happens to be sitting on the shoulders of an Indian giant.

Karnalyte controls the mining rights to about 370 square kilometres of central Saskatchewan around the small town of Wynyard, about 160 kilometres north of Regina. And yet Karnalyte’s Wynyard site sits dormant and desolate. The test wells drilled in a flat field two kilometres south of town are no longer in service and the company appears to be far from ever extracting any of the riches that lie underground.

He founded Karnalyte Resources and paid $75,000 in 2007 for the mining lease rights to the area around Wynyard. Karnalyte’s $65-million IPO raised $14 million more than expected and the company went public on the Toronto Stock Exchange in 2010. In 2011, Karnalyte’s stock price had reached as high as nearly $17 a share. By the 2018 annual general meeting, it had evaporated to about 36 cents a share, another big reason for the shareholders’ displeasure.

But something about the vote seemed fishy to the dissident shareholders, which includes, among others, Villeneuve, Van Dam, Stan Phinney and Karnalyte’s founder, Robin Phinney, who’s twice been CEO of the company and twice been turfed by the board over allegations he breached his employment contract, improperly solicited proxies, and improperly spent the company’s capital.

Villeneuve had made printouts of the website pages after he voted against Karnalyte’s slate of directors. Karnalyte employed a company called D.F. King to act as its proxy solicitation agent for the 2018 AGM vote.

Star Diamond (DIAM) seems to be in the same boat! Is that a thing now in Sask, Can? Shareholders used to own 100% of it then though mismanagement it changed to 60% Rio Tinto, 40% Star then more mismanagement and lawsuits changed that to 75% Rio Tinto, 25% Star and mass dilution!

ha lol

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