No Toro for Axmin

After believing it had found a suitor, Axmin (AXM-T, AXMIF-O) must go back to the drawing board.

The Toronto-based junior with its key assets in the Central African Republic confirmed that Toro Gold, the company that was set to acquire Axmin, can’t come up with the funds it needs to close the deal.

Trouble with the deal was initially signaled at the beginning of December when Toro told Axmin that it wouldn’t be able to raise the necessary funds by a December 4th deadline.

Toro had planned to complete an equity financing in order to raise the money but when it couldn’t the companies tried to find an alternative transaction structure. Axmin says those discussions have now been broken off.

Axmin had initially given Toro Gold a period of exclusivity until December 4, if Toro couldn’t raise the money by that time, it would owe Axmin up to $300,000 its costs associated with the transaction.

The deal with Toro came after Axmin management launched a strategic review in March of last year.

Guernsey-registered Toro is a private gold exploration that said it was looking to broaden its position in sub-Saharan Africa through the acquisition of Axmin.

While its main assets are in the Central African Republic, Axmin also has assets in Mali, Sierra Leone and Senegal.

The initial deal had Toro paying 14¢ per Axmin share in cash.

Axmin became vulnerable after a late 2008 edict from the government of the Central African Republic restricted the company’s permits to only gold.

The decision was particularly damaging since the company had discovered promising iron ore assets on its Bambari permits in the country.

The company’s most advanced asset is Passendro – also in the Central African Republic — which has a measured and indicated resource of 32 million tonnes grading 2 grams gold per tonne for 2 million contained ounces gold. The project also has an inferred resource of 22 million tonnes grading 1.6 grams gold for 1.01 million oz. gold.

Passendro – which sits 60 km north of Bambari – had a feasibility study finished in April of 2008 which considered an open-pit mine with a carbon-in-leach plant.

In Toronto on January 4 the company’s shares closed at 8.5¢ on 294,000 shares traded.