David Elliott, Shareholder of Auro Resources Corp.

December 21, 2012 14:46 ET

Shareholder of Auro Resources Corp. Files a Petition in the Supreme Court of British Columbia Against Company and Its Directors

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 21, 2012) - Shareholders of Auro Resources Corp. (the "Company"), please take notice that:

Andrew Williams, the beneficial owner of 972,500 common shares of the Company (Williams or the Petitioner), on December 19, 2012 filed a petition (the Petition) in the Supreme Court of British Columbia (the Court) against the Company and several of its directors (the Respondents).

In the Petition, Williams seeks a declaration that the Respondents have acted in a manner that is oppressive and unduly prejudicial to the Petitioner. Among other issues, the Petitioner specifically refers to the proposed private placement announced by the Company in its news release dated December 17, 2012, which is available on www.sedar.com (the Proposed Placement). The Petitioner states that the Proposed Placement is in contravention of the policies and rules of the TSX Venture Exchange (the TSX-V).

The Petition cites TSX-V policies that prohibit companies from issuing stock for under $0.05 per share. The Company has announced that it intends to issue shares under the Proposed Placement at $0.015 per share. While TSX-V policies allow a Company to issue shares at less than $0.05 per share under certain temporary relief measures (the Relief Measures), the aggregate proceeds available to a company under these Relief Measures is limited to $500,000. The Petition claims that the Company, on November 7, 2012, already raised approximately $415,000 relying on the Relief Measures, and is therefore not entitled to raise an additional $700,000 as it intends to do under the Proposed Placement.

The Petition also claims that the Company has announced that it intends to seek a $150,000 advanced loan prior to the closing of the Proposed Placement (the Loan). The Company's news release dated December 17, 2012 announcing the Proposed Placement fails to disclose the purpose for which these funds are needed. The Petitioner is not aware of any current exploration activities or any other business activities for which the Loan is required.

In the Petition, Williams also seeks a number of orders, including an order to restrain the Company from issuing any additional shares, from incurring any additional debts, except those in the ordinary course of business, and from paying any further remuneration to any directors, officers or other non-arm's length parties of the Company.

Yesterday, David Elliott, as a Concerned Shareholder of the Company, announced that he has filed and mailed an information circular (the Dissidents Information Circular) with Canadian securities regulators and has initiated a proxy solicitation process with the objective of having a new board of directors elected at the AGM. Copies of the Dissidents Information Circular are being mailed to shareholders and are available online at www.sedar.com under the Company's profile, or by contacting Laurel Hill Advisory Group.

The Petitioner is an associate of the Concerned Shareholder, and some of the complaints set out in the Petition are similar to the reasons for the dissident proxy solicitation, as described under the heading "Reasons for a Change of Management" of the Dissident Information Circular. The Concerned Shareholder encourages the shareholders of Auro Resources to vote their GREEN proxy prior to December 28, 2012 at 5:00pm Pacific Time. If you have any questions or need assistance in voting your shares please contact the Concerned Shareholders proxy solicitation agent, Laurel Hill Advisory Group 1-877-452-7184, collect 416 304-0211 email: assistance@laurelhillag.com

It is expected that the Petitioner's application for an interim injunction will be heard by the Court on Friday, December 21, 2012, at which time the Petitioner will seek an injunction to restrict the ability of the Respondents to proceed with the Proposed Placement and the Loan prior to the AGM.

David Elliott, Concerned Shareholder

Contact Information

  • Laurel Hill Advisory Group
    North American Toll Free: 1-877-452-7184
    Banks, Brokers or Collect Calls: 1-416-304-0211
    assistance@laurelhill.com