A short statement from Colossus Minerals (TSX:V.CSI
, Stock Forum
) has cast doubt on a ‘last ditch’ arrangement with noteholders to save the company.
A January 2 news release
announced the company had “received a proposal from these noteholders and Sandstorm Gold Limited (TSX:T.SSL
, Stock Forum
) which, if implemented would offer the Company the ability to carry on business activities past December 31, 2013 with a view to its potential sale or future recapitalization.”
The deal, which was to have been discussed at meetings with noteholders and shareholders, would have left existing holders of common shares with “massive dilution to the point where they would, in aggregate, hold approximately 1.7% of the outstanding common shares after giving effect to the terms of the proposal.”
The news release today, however, announced no such meetings would take place
The note said, in totality: “Colossus Minerals Inc. announced today that the special meeting of holders of the Company's outstanding gold-linked notes called for January 10, 2014 has been cancelled. The special meeting of shareholders of the Company that was called for January 20, 2014 has also been cancelled.”
Colossus stock dropped 15.3% on the news to $0.055 per share. The company has a $9.7 million market cap on 175.5 million shares outstanding.