Caerus Shares Crash

Vancouver-based Caerus Resource (CA-V) saw its share price nosedive 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 South American nation, 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 set was 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.

What may be of interest to investors is that, according to INK Research’s insiders report, there was significant selling of Caerus shares by company insiders when the company’s stock first spiked to 60¢ — a price that they never went much beyond. Caerus chief executive Adrian Hobkirk sold off a significant amount of his common shares right when Caerus shares touched a high of 60¢ back in June of last year. Direct A.D. Drummond also sold a significant amount of shares at that time.

As for things falling apart with White Gold, 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 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 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.”

In November 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 — the day the news was released — Caerus shares fell 35% or 15¢ to 27.5¢ in Toronto on 1.38 million shares traded.