Gold-deal de­lay Paynes Cer­vantes

The West Australian - - WEST BUSINESS -

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.

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