GREY:STTYF - Post by User
Post by
gjervison Dec 23, 2013 1:22pm
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Post# 22033788
thats a wrap
thats a wrapToronto-based Colossus Minerals (TSX:T.CSI, Stock Forum) has halted trading as news has disseminated that the company may not be able to continue business activities past December 31 due to much-needed financing arrangements having been cancelled.
Late Friday, the company announced Arias Resource Capital Fund II L.P. and Arias Resource Capital Fund II (Mexico) L.P. had informed management that the ARC Funds would not be proceeding with the two tranche financing previously announced two days earlier.
That financing had been previously described as a loan of $4 million and $21 million in private placement financing. The agreement was conditional on Sandstorm Gold (TSX:T.SSL, Stock Forum), which has a long-term precious metals purchase agreement with Colossus, agreeing to concessions that “would defer and reduce certain of the company's financial liabilities.”
Colossus had hoped to use the funds to finance the Serra Pelada project in Brazil, for which it needs around $70 million to move to production.
The company, which has dropped from a share price of $4.50+ a year ago to $0.11 when trading was halted, has been drowning in bad news over the last few months as the TSX has notified it will be looking into delisting it’s warrants and unsecured gold-linked notes, and it fell 40% in early December when Sandstorm announced it was reviewing its investment in the firm while dewatering delays threatened to push production back to Q2 2014.
In what appears to be an effort to bolster the stock despite the likelihood that it will cease to do business in the next week, the company released a 43-101 Monday morning, burying references to the lost financing in the bottom of the statement. A susequent 'correction from source' moved that information to the top of the document.
Trading in Colossus resumed at 10:15am Pacific and shares quickly plummeted to $0.03.
Read more at https://www.stockhouse.com/news/natural-resources/2013/12/23/colossus-minerals-t-csi-loses-financing-collapse-appears-imminent#oh3vVoj72hKCAE4Z.99