CANADA RARE EARTHS INC (CVE:CJC) (PINK:CJCFF) share price gapped down after the company admitted their latest search for minerals led nowhere.
CJC tanked 40% on Monday under a trading volume of 2.6 million. The trading had been halted for half the session but it didn’t help to alleviate the tension among traders.
The roll down was a reaction to the latest news. On February 27, the company said they have arranged to acquire three new graphite projects in Quebec. The company also announced the results of Goeland rare earth exploration program.
The last part of the news report was the cause of panic on the market. CJC confirmed their exploration program has failed to find concentrations of economically recoverable rare earth minerals. Full results of the phase 1 drilling program which had 13 holes tested should be available in the coming days.
The acquisition of new properties was a natural continuation of their business ventures. However, it will be a costly one. CJC clearly doesn’t want to take chances anymore, thus the properties they now seek to acquire Lac Des Isles West, La Loutre and Labelle already have a history of exploration and even production dating back a couple decades.
The acquisition terms for all the properties are based on the related options held by the company which allow it to earn a 100% interest. The total costs could go up to $1.262 million and 3 million common shares, not including the $1 million worth of milling royalties that will be retained by vendors.
