BC court approves gold miner takeover over dissenting shareholder’s fairness challenge
The deal ran into opposition from a dissenting shareholder and former Gold Basin president and director, who held about 1.45 percent of the shares voted against approval and spoke for holders representing roughly 7.9 percent in total. He argued the price was unfair because it rested on the market value of the shares when a cease trade order froze trading, and did not reflect the true value of the project. He also argued the fairness opinion was deficient and that shareholders could not make an informed decision.
The valuation fight is the part worth the attention of anyone who reads fairness opinions for a living. The British Columbia Securities Commission had issued a cease trade order against Gold Basin in May 2025 for failing to file audited financial statements. Trading was halted the next day at $0.045 a share. Stifel Nicolaus Canada Inc., retained by a special committee, valued the deal at an effective $0.15 per share and made no downward adjustment for the trading halt. The court found Stifel had not relied only on frozen pre-order prices but also on comparable trading and precedent transaction analysis.
Justice Fitzpatrick applied the Supreme Court of Canada’s test from BCE Inc. v. 1976 Debentureholders, asking whether the arrangement was made in good faith, met statutory requirements, and was fair and reasonable. She found the dissenting shareholder had put forward no competing valuation or fairness opinion, and no expertise to supply one.
She also placed weight on necessity. As of May 14, 2026, Gold Basin reported liabilities of about $2,123,183, no cash, no revenue, and no market for its shares while the cease trade order stood. A $900,000 bridge loan from CANEX was keeping it going. Rejecting the deal, the court said, would do nothing to return value to shareholders.
The arrangement passed at the June 4, 2026 meeting with about 75.8 percent of votes cast in favour, above the two-thirds threshold. Dissenting shareholders keep the right to be paid fair value for their shares.
