Almost needless to say, this made Creston (CVE:CMS), (PINK:CRSMF) a volume leader on the TSX Venture Exchange (CVE) and the most wanted by investors item on Tuesday. Resultant from the take-over news, the shares opened up with a gap from the previous close and finished the day at $0.57, 24% higher than they ended the previous session. It was the turnover that made the big story here, as we already mentioned.
Actually, the stock did not gain value during the day, the close price was lower than the open one as a black spinning-top was formed on the chart. This suggests great indecision between the bulls and the bears. It also implies that the further rise of the shares is far from guaranteed.
The huge stir of the stock came after Creston announced entering into a definitive arrangement agreement with Mercator, under which the latter will acquire all of the company’s outstanding common shares. As written in the release, the deal represents “a Friendly Business Combination to create a significant Copper-Moly company with an industry-leading growth profile”.
Surely, investors were very impressed by the great news. Further positive data can be derived from Creston’s financial reports. They show a solid cash position of $12.5M.
The same financials, however, reveal that the company has no revenue and has recorded a net loss of $740K for the quarter ended Jan. 31, 2011. Maybe, the agreement with Mercator Minerals will make things much better for Creston’s shareholders. However, only the future will show whether “the Business Combination” effect will be positive or not.
