A minority group of shareholders in Blue Moon Metals , which holds a first-resource-stage zinc-silver project in California, says its CEO issued defensive stock offerings that destroyed an estimated C$8 million in stock value.
Blue Moon’s McGrath said the company required capital raisings to stay afloat. Commenting by email, he said Michael’s father, Jack McClintock, was on the board at the time of the first financing, and that the McClintock Group could have asked to be part of the financings. They were needed because the company had C$30,000 in cash and C$315,000 in debt as of the end of 2022.
Michael McClintock issued an open letter to shareholders in April 2023 raising concerns. Management wasn’t providing adequate updates, it might try to sell the Blue Moon project at a significant discount to its market value, and the share roll back was unnecessary and had further diluted shares, McClintock said. He offered to be CEO for a salary of C$1 a year.
“In a lot of cases, issuers, particularly junior exploration companies, just need capital to carry on and keep the lights on and continue their programs,” Brown said by phone. “There are definitely cases in high-profile situations where there can be defensive tactics, but that is something that the securities commissions do focus on in the context of particular proxy contests or transactions.”
McGrath declined to say why or how the proposed board members were attracted to the company, but said Blue Moon would update shareholders in the coming weeks of its plans and direction.The CEO said the value of the McClintock Group’s shareholdings since Feb 13, 2023, the date of Jack McClintock’s resignation from Blue Moon, to Oct. 10 this year have gained about 250%.