VANCOUVER, Wash. and WALLACE, Idaho, Nov. 1, 2005 (PRIMEZONE) -- Silver Valley Partners, LLC, a Washington Limited Liability Company, announced today that it has filed a lawsuit against Sterling Mining Company (Pink Sheets:SRLM) in Shoshone County District Court in Wallace, Idaho, seeking a restraining order to stop a special meeting of shareholders called by the Sterling board of directors for November 2, 2005. The lawsuit also demands that Sterling hold an annual meeting of shareholders and elect directors. Idaho law provides that if a corporation has not held an annual meeting of shareholders within 15 months, the Court can order that one be held.
The legal basis stated in the restraining order against the special meeting is that Sterling has refused to provide Silver Valley Partners with a list of all Sterling shareholders and their addresses so that Silver Valley Partners can contact other shareholders prior to the special meeting. Idaho law requires corporations to provide such information to shareholders, and according to the lawsuit, Sterling's management has repeatedly refused to provide a complete and accurate shareholder list as required by Idaho law.
Silver Valley Partners also announced that it has brought suit against Sterling President Ray De Motte and Director Carol Stephan in Federal District Court, alleging in the suit that De Motte, Stephan and other defendants defrauded them and other plaintiffs of $3.2 million, plus lost profits and interest, in investments they made in Sterling and other business concerns.
Silver Valley Partners' manager, James D. Christianson, stated: "The purpose of the special meeting is to authorize an additional 20 million shares of common stock, which Silver Valley Partners opposes because Sterling's management and board of directors lack accountability to shareholders, have failed to show progress toward the company's stated goals, and will continue to squander the company's value if this large share increase is approved. Shareholders previously approved on June 28, 2003 an increase in authorized capital from 5 million to 20 million shares, all of which are now apparently issued and outstanding. The issues in the lawsuit brought in Federal District Court are not at issue in the lawsuit to stop the special meeting, but they do form the core of Silver Valley Partners' opposition to the share increase. In place of the special meeting, Silver Valley Partners has demanded an annual shareholder meeting in order to put Sterling's current board of directors up for election by shareholders. I believe none of the current directors have been elected by shareholders, instead being appointed to vacant director positions by a majority vote of the board."
In addition to its two lawsuits, Silver Valley Partners announced that a shareholder advocacy website for Sterling located at http://www.savethesunshine.com will be launched today by a Silver Valley Partners investor and Sterling shareholder. Silver Valley Partners has been informed that the website will initially have limited functionality and content due to its swift launch schedule, but that it will be immediately capable of publicizing the viewpoints of all Sterling shareholders, regardless of whether they share the same opinions.
The lawsuit against Sterling and related filings will be posted on http://www.savethesunshine.com and interested parties can obtain copies of the pleadings from the Shoshone County (Idaho) Clerk's office.