Columbus Silver Corporation (CVE:CSC) (PINK:CSLVF) had the share price basically locked on the open market after the company announced a pending acquisition deal.
CSC stock added 54.5% during Wednesday’s trading session under a heavy trading volume of 1.1 million, which was 14.5 times larger than the average turnover of 76 thousand.
The new share price of 17 cents was determined by the recent deal. On September 7, 2011 the company announced to have entered into a memorandum of understanding with Santa Fe Gold Corporation (OTC:SFEG) under which the latter agreed to acquire CSC.
If all goes right the deal should be made into a definitive agreement under which Santa Fe will acquire all of the outstanding common shares of Columbus paying a generous CAD0.20 per share. The whole transaction is valued CAD9.97 million.
The acquisition decision is not finalized though. Santa Fe has to obtain funding required to consummate the acquisition before the companies can proceed to merge. Columbus has an option to terminate this acquisition if funds are not available by November 30, 2011. Until then, Santa Fe has provided Columbus with a bridge financing to cover CSC’s financial commitments prior to closing. The capital should total around half a million dollars by December 2011.
The deal is also a subject to approval from Columbus shareholders, as well as court and regulatory approvals, including the TSX Venture exchange
