November 19, 2015
Vancouver, B.C. – November 19, 2015 - I-Minerals Inc. (TSX.V: IMA; OTCQX: IMAHF) (“I-Minerals” or the “Company”) provides an update to the Company’s press release of April 21, 2015 wherein I-Minerals announced that it and Dr. Thomas Gallo jointly filed against Unimin Corporation, a wholly-owned subsidiary of SCR Sibelco NV (“Unimin”) and two of its officers claims for Abuse of Process, Malicious Prosecution and Unfair Deceptive Trade Practices (“Legal Action”). Unimin sought to have such action dismissed, but on September 19, 2015, Unimin’s efforts failed. In the words of Judge Max O. Connor of the United States District Court for the Western District of North Carolina: “The court finds that such allegations are more than sufficient to plausibly allege willful acts whereby Defendants allegedly sought to use the existence of the proceeding to gain advantage of the plaintiff in respect to a collateral matter.”
Thomas Conway, President and CEO of I-Minerals Inc. commented:
Neither I-Minerals nor Dr. Gallo wanted the initial legal action, but at the same time, the fact that a company of the size of Unimin would attempt to shut down I-Minerals as a potential competitor is a testament to the quality of our quartz products. It is our belief that the actions taken by Unimin were a spurious attempt to use the courts and the legal process as a means to stop Dr. Gallo from working in the HPQ industry and to impair I-Minerals from becoming a competitor in select components of the HPQ industry. Our True QTM quartz products are produced through standard flotation processes, which certainly cannot be regarded as a Unimin “trade secret”. Unimin makes the highest purity quartz products in the world often referred to as Ultra High Purity Quartz (“UHPQ”) products which require much more complex production technologies than flotation. At the start-up phase of our Bovill operations, we do not intend to target these UHPQ markets, but this is not to say that if we found a particularly pure area of the deposit we would not consider production of UHPQ.
August 12 and13, 2014 Unimin Corporation (“Unimin”) filed an action in the General Court of Justice, Superior Court Division in Mitchell County, North Carolina (the “State Court”) seeking among other things, injunctions against Dr. Thomas Gallo, a former Unimin employee, and I-Minerals to terminate contacts and to unwind any alleged infringement on purported Unimin trade secrets, the return of unspecified, purportedly confidential information and damages related thereto (the “Injunction Action”). Unimin offered to withdraw the action if Dr. Gallo agreed to never work in the quartz industry again and I-Minerals agreed not to pursue HPQ – even though Dr. Gallo’s non-compete agreement had expired and I-Minerals was producing HPQ by a flotation process similar to that uses in hundreds of mines worldwide. Subsequently the State Court issued a Temporary Restraining Order restraining and enjoining Dr. Gallo from disclosing to the Company specifications of Unimin’s processes in producing high purity quartz. All other actions sought by Unimin other than the Motion for Preliminary Injunction were denied. (See IMA August 18, 2014 press release).
September 17, 2014, the State Court denied Unimin’s Motion for a Preliminary Injunction pursuant to Rule 65 of the North Carolina Rules of Civil Procedure and determined “Unimin has failed to present sufficient evidence to show that it is will succeed on the merits of its claims.” (See IMA September 22, 2014 press release)
December 2, 2014 Unimin files a voluntary dismissal of its lawsuit against I-Minerals and Gallo.
March 24, 2015 I-Minerals files suit for Abuse of Process, Malicious Prosecution and Unfair and Deceptive Trade Practices against Unimin arising out of the dismissed Injunction Action. All three claims are centered around I-Minerals’ contention that under the guise of a lawsuit to protect Unimin’s confidential, proprietary, and/or trade secret information, Unimin was actually attempting to gain information and documents from competitors, to interfere with the business relationships of competitors, to stifle lawful market competition, and to prevent Dr. Gallo from plying his general skills and knowledge in manufacturing high purity quartz. (See IMA April 21, 2015 press release)
May 13, 2015 Unimin moves the action to the United States District Court Western District of North Carolina (the “Federal Court”) and seeks to have all three claims dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedures.
Court Denial of Unimin Motion to Dismiss
Unimin sought dismissal of the action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedures relying primarily upon the Noerr-Pennington Doctrine which essentially guarantees citizens their First Amendment right to petition the government for redress without fear of antitrust liability. However, the Noerr-Pennington doctrine does not protect litigation from suit under the antitrust laws if the litigation is a “sham.” The Supreme Court in Noerr recognized that if an action “ostensibly directed toward influencing governmental action, is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor [then] the application of the Sherman Act would be justified.” The court found that dismissal based on the assertion of the Noerr-Pennington Doctrine was inappropriate.
Malicious prosecution requires that the “the defendant initiated the earlier proceeding that he did so maliciously and without probable cause and the earlier proceeding terminated in the plaintiff’s favor”. With respect to probable cause, the court found the factual allegations in the complaint “raise a right to relief above the speculative level” and dismissing the count on this basis would be inappropriate. With respect to special damages, the court found that the complaint alleges the Temporary Restraining Ordered interfered with contractual rights between I-Minerals and Dr. Gallo, and the lawsuit required I-Minerals to hand over proprietary information. Thus, the Plaintiffs have properly pled special damages.
Abuse of process, which is generally defined as the misuse of legal process for an ulterior purpose and that “(1) a prior proceeding was initiated against the plaintiff by the defendant or used by him to achieve an ulterior motive or purpose and (2) once the proceeding was initiated, the defendant committed some willful act not proper in the regular prosecution of the proceeding”. The court found the Plaintiffs allegations to be more than sufficient to plausibly allege willful acts whereby Defendants sought to use the existence of the proceedings to gain advantage of the plaintiff in respect of collateral matter.
In conclusion the court found the facts alleged in the Amended Complaint plausibly state grounds for relief for all of the claims asserted and therefor ordered that the Defendants Motion for Dismiss Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (#12) DENIED without prejudice.
The Company also announces that it has retained Future Money Trends, LLC, of Glendora, California (“FMT”), to provide the Company with online marketing services for consideration of $70,000 U.S. FMT is headed by Kenneth Ameduri, a media and investor relations specialist in the natural resources sector. Neither FMT nor any of its owners or employees has any direct or indirect interest in the securities of the Company or any right or intent to acquire such securities. The appointment of FMT is subject to the Company making the required filings with the TSX Venture Exchange as provided for in its Policy 3.4.
About I-Minerals Inc.
I-Minerals is developing multiple deposits of high purity, high value halloysite, quartz, potassium feldspar and kaolin at its strategically located Helmer-Bovill property in north central Idaho. A 2014 Prefeasibility Study on the Bovill Kaolin Deposit completed by SRK Consulting (USA) Inc. highlights the potential of the Helmer-Bovill property’s Bovill Kaolin deposit: after tax NPV6 of $212 million; 30.5% IRR; 3 year payback and $72.7 million initial CAPEX; $84 million CAPEX including life of mine sustaining capital over a 25 year mine life. Ongoing development work is focused on moving the project towards production.
Per: “Thomas M. Conway”
Thomas M. Conway,
President & CEO
The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for the sale of securities, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by mean of a prospectus containing detailed information about the company and management, as well as financial statements.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
This News Release includes certain “forward looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various risks. Actual results could differ materially from those projected as a result of the following factors, among others: changes in the world wide price of mineral market conditions, risks inherent in mineral exploration, risk associated with development, construction and mining operations, the uncertainty of future profitability and uncertainty of access to additional capital.
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