Colossus Minerals (T.CSI) in death rattles as director quits, TSX delists

Chris Parry Chris Parry, Stockhouse.com
1 Comment| January 21, 2014


Holders of stock in Colossus Minerals (TSX:T.CSI, Stock Forum) that hoped for some last minute financial wizardry to dig their company out of a substantial hole have been left holding the bag, as the Toronto Stock Exchange has announced the company will be delisted as of February 21, 2014, and trading will remain halted until that time.
 
On the back of the news, J. Alberto Arias has resigned from the Colossus board of directors, leaving John Frostiak as the sole remaining director.
 
Previously, Arias Resource Capital Fund II L.P. and Arias Resource Capital Fund II (Mexico) L.P. informed management that ARC Funds would not be proceeding with the two tranche financing announced late last year.

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.  

The Arias resignation comes barely a week after the company announced it would file for bankruptcy protection so it could pursue a court-supervised sale or restructuring with creditor protection.
 
Colossus management was working on a deal that would have left shareholders with just 1.7% ownership in the company in return for a chance to continue operations.

Tags: GOLD

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SN3165
"Colossus management was working on a deal that would have left shareholders with just 1.7% ownership in the company in return for a chance to continue operations." Why "Was?" The restructing is still in place.
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January 21, 2014
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