Gold-deal delay Paynes Cervantes
It’s been nearly a year since Cervantes Corporation
announced it would pick up the historic Paynes Find gold project from Tony Sage’s European Lithium in a cash and scrip deal worth $1 million.
After 11 months and four extensions to the settlement date, shareholders are still waiting for the deal to close.
To make matters worse, executive chairman Collin Vost told the Bull yesterday he thinks the latest revised settlement date of November 28 is also unlikely to be met.
So what’s the hold-up? Vost said the deal had been beset by technical issues, caveat issues, red tape, one of the company’s directors being on extended sick leave and perhaps most importantly, a shortage of cash.
Chinese-backed Minjar Gold had emerged as a potential investor but settled on an agreement around milling options.
Nevertheless,Vost assured us the deal would get over the line, most likely in the new year.
“Both parties in the transaction are extremely confident and dedicated to resolving all issues,” the boss of New York Securities,
previously Zurich Securities, said.
A rights issue may be the way forward, though when Cervantes tapped shareholders for $1 million last year, subscriptions came to just $11,086.
Cervantes has just $9000 in the kitty according to its last quarterly, but Vost said the company had access to working capital.