Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Columbus Silver Corporation (TSX VENTURE:CSC) (“Columbus Silver” or the “Company“) is disappointed to announce that the proposed acquisition (the “Acquisition“) of the Company by Santa Fe Gold Corporation (“Santa Fe“) has been terminated due to Santa Fe’s inability to complete the transaction.
Under the Acquisition, Santa Fe had agreed to purchase all of the issued and outstanding common shares of Columbus Silver for $0.20 per share. Columbus Silver and Santa Fe also agreed to use best efforts to complete all of their respective conditions to this transaction on or before March 31, 2012, with a final deadline of May 31, 2012 (the “Deadline“). Though all of Columbus Silver’s material obligations have been completed for some time, including without limitation obtaining shareholder and court approval, Santa Fe has been unable to complete its obligations by the Deadline. Most notably, Santa Fe has informed the Company that it is not in a financial position to purchase the outstanding securities of Columbus Silver at this time.
Pursuant to the definitive agreements governing the Acquisition, including without limitation the bridge financing agreement dated November 29, 2011 between Santa Fe and Columbus Silver (the “Bridge Financing Agreement“), Santa Fe has been paying all of Columbus Silver’s ongoing costs, including those associated with the Acquisition and also those advanced to Columbus Silver in December 2010 in connection with a previous aborted transaction. Columbus Silver estimates that an aggregate of approximately $1,060,000 has been advanced by Santa Fe to Columbus Silver in connection with the foregoing. Due to the operation of the Bridge Financing Agreement, all such payments are only refundable if a “refund event” occurred prior to the Deadline. Columbus Silver is pleased to announce that because no such event appears to have transpired, it expects that all funds received from Santa Fe to date will be deemed non-refundable. A copy of the Bridge Financing Agreement is contained as Schedule “C” of the arrangement agreement filed on SEDAR on December 16, 2011, and is available at www.sedar.com.
Santa Fe has expressed a desire to continue negotiations with the Company respecting a future proposed acquisition, including without limitation a direct acquisition of one or more of its mineral properties. Columbus Silver is exploring all avenues for its future and for maximizing shareholder value. Columbus Silver wishes to thank all of its shareholders and service providers for their patience and hard work in dealing with this transaction.
ON BEHALF OF THE BOARD,
Robert F. Giustra, President & CEO, Director
