Vancouver-based Caerus Resource (CA-V) saw its share price nose-dive on Wednesday after the company announced it would not be acquiring key assets in Colombia.
Indeed the entire Caerus story has been built on the prospective gold properties it was set to acquire in the new gold darling of the market.
The permits were ideally situated for exploration, with the first group sitting near Greystar Resources’ (GSL-T, GSL-L) Angostura and Ventana Gold’s (VEN-T) La Bodega property in the northeastern flank of the country, while the second were near Anglo Gold Ashanti’s (AU-N, AGG-A) La Colosa project in the central part of the country.
The permits were to come to Caerus through Alberta-based and privately held White Gold which held the permits through a Colombian base subsidiary.
White Gold said it was cancelling the deal because the plan of arrangement – which was initiated in September of last year – was not completed by the Dec. 31 deadline.
For its part, Caerus says the arrangement was not completed because it hadn’t yet completed due diligence on White Gold’s ownership of the properties – and it blamed White Gold for its failure to do so.
Caerus says White Gold failed to confirm that it was indeed the registered and recorded owner of Oro Barracuda under applicable Colombian laws. Oro Barracuda is the name of the subsidiary that holds the permits.
Ken Sadowski, a director with Caerus was reluctant to speak on the matter, saying that the company was in discussions with its lawyers.
Sadowski did say that Caerus “complied with our terms of the plan of arrangement” and that it has “lots of other opportunities in Colombia.”
Back in November of last year Caerus completed a private placement that saw it raise $1.08 million by issuing 3 million units at a price of 36¢ per unit.
It said at the time that it planned to use the proceeds to advance gold projects in Colombia.
White Gold was not immediately available for comment.
In Toronto on Jan. 13, Caerus shares fell 35% or 15¢ to 27.5¢ in Toronto on 1.38 million shares traded.
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