Creso Exploration Inc. (CVE:CXT) (PINK:CRXEF) collapsed last week after their partner bailed out of a joint venture. Traders remain indecisive at the time.
CXT share price gapped down 25% on Thursday and had the traders’ dispute over the chance of recovery on Friday, ending the day with a doji – a sign of indecision. A quick price recovery is very questionable since recent bad news is still holding influence over the price.
Investors sold after the company said the joint venture with Hunter Dickinson Resources Ltd. is no more active. Apparently, it was Hunter Dickinson who decided not to participate.
In April the company had granted Hunter an option to acquire an almost 70% interest in part of Shining Tree property in Ontario. The deal was originally worth around $43 million – $2 million payable directly to Creso and $41 million as staged exploration expenditures on the project.
Creso doesn’t have the capital to carry out the exploration themselves. It would create massive dilution to shareholders if the company decided to pursuit this venture by raising funds through equity sales.
Market cap dropped to $13 million on the sell-off. The company is worth around $12.1 million, thus it is likely the bottom for now. Creso is actively engaged in the exploration of its properties, but currently has no revenues and only survives by selling stocks.
