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Colossus Minerals (T.CSI) clobbered by Dundee, names new CFO, drops 11%

Chris Parry Chris Parry,
0 Comments| October 17, 2013

A devastating report by Joseph Fazzini of Dundee Capital Markets has seen the share price of Colossus Minerals (TSX:T.CSI, Stock Forum) tumble 11% down to $0.61, continuing a fall from $0.86 earlier in the month.
Already under pressure from technical challenges in its Serra Pelada project in Brazil, Fazzini held nothing back, stating “given the technical challenges encountered (brought on by water and challenging ground conditions), realizing [potential opportunities] now appears a less likely scenario for the shareholders of CSI.”
It continues, “In the case of CSI, we believe the options for raising new capital are few and expect that any future cash injections would likely be arranged under highly punitive terms. The prospect of adding further financial burden to what is already a leveraged capital structure in the context of a soft metal price environment has us concerned.”
“Given our lack of balance sheet comfort, management’s failure to budget and operational challenges that remain, we are downgrading CSI to a SELL (from Neutral) and reducing our target to $0.50 (from $0.80.”
Colossus responded by announcing a new Chief Financial Officer, David Massola:
“Mr. Massola has over 30 years of experience in the mining industry and has held a broad range of executive and management positions in Canada, Chile and the United States. Mr. Massola was President and Chief Executive Officer of Continental Nickel Limited from 2011 until it was acquired by IMX Resources Limited in 2012. Mr. Massola served as Chief Financial Officer and Senior Vice President of Globestar Mining Corp. from 2006 until it was acquired by Perilya Limited in 2011. Prior to joining GlobeStar, Mr. Massola served as Chief Financial Officer and Vice President of De Beers Canada, Inc. from 2001 to 2006, where his responsibilities included arranging debt facilities and the implementation of all accounting systems and financial controls for the Victor and Snap Lake mines.”
That move may have prevented further share price negativity, as the Dundee coverage didn’t hold back on punishing management for the company’s failings.
“In repeatedly failing to adequately budget and deliver on expectations set by management, investor patience has understandably worn thin,” said the report, stating an expectation that the company would run out of money by Q1/14 with little potential for a takeover.

Tags: GOLD

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