Columbus Silver Corporation saw its stock jump up by nearly 60% as news that it was to be acquired by US based company Santa Fe Gold Corporation for $10 million came to light. The all cash deal will see Santa Fe pay 20 cents per share for the 36 million shares of the Vancouver based Columbus Silver Corp.
The company president and Chief Executive Officer Robert Giustra said that this was a very positive development for Columbus Silver shareholders. The consideration per share represented a significant premium over market prices for the last several months. On the Toronto Stock Exchange, Columbus Silver Corp. stock was up 6.5 cents, or more than 59 per cent, at 17.5 cents in late afternoon trading Wednesday.
Pierce Carson, president and Chief Executive Officer of Santa Fe, said that the deal was strategically important to Santa Fe. He said that it would potentially more than double their controlled silver and gold resources available for processing at their fully-permitted and operating flotation mill near Lordsburg, N.M. Mr Carson added that Columbus Silver's portfolio of seven high quality U.S. silver-gold properties in New Mexico, Arizona, Nevada and Utah provided excellent upside exploration potential to Santa Fe.
The Memorandum of Understanding contemplates a business combination by way of a court approved plan of arrangement. The proposed deal is subject to the final approval of the boards of directors of both companies and is conditional on stock exchange, regulatory and court approvals. It is also subject to Santa Fe's commitment of the required funding.