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mechanicon Mar 01, 2011 1:25pm
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JUST Out---From todays Globe & Mail
JUST Out---From todays Globe & Mail
Canada Lithium plunges on resources estimate
TIM KILADZE
Globe and Mail Blog
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Shares of Canada Lithium Corp. (0.91-0.44-32.59%) fell 33 per cent Tuesday after the company revealed its resource estimates may not be as bountiful as first expected.
The warning comes less than two months after the company sold $127-million of common shares at a 17 per cent discount.
Canada Lithium’s stock was halted late Monday. During the pause, the company announced it had hired a firm to conduct an independent review of its resources levels. An internal review determined there was a “material reduction” in the amounts expressed in the 43-101 resource estimate it filed last year.
Canada Lithium “was unable to reconcile the results of the internal review, which incorporated various resource estimation methodologies, with the reported 43-101 resources announced in October 2010,” the company said in a statement.
Last fall, president and chief executive officer Peter Secker said the his team had “confirmed that [the company’s] project ranks, in terms of size, among the top two or three known hard-rock lithium deposits in the world.”
The new finding is particularly troubling for investors because Canada Lithium partially financed the project by selling common shares at a 17 per cent discount in January. The day before the deal was announced the stock closed at $1.80, and is now hovering around 90 cents.
BlackRock Inc. also invested $10-million through a private placement in December.
The independent review is expected to take two weeks