Toronto-based Franco-Nevada Mining (TSE) has become another victim of the market malaise that is currently affecting Canadian gold stocks.
With its share price down to just below $7 on the Toronto Stock Exchange from $16.25 a year ago, the company has been unable to complete a transaction in which it planned to buy a block of its own shares from Corona Corp (TSE).
Under a proposed agreement with Corona, Franco-Nevada had planned to buy 1,800,001 shares at $9 per share. But under Ontario Securities Commission rules, the deal was subject to Franco-Nevada’s shares trading at within 85% of the $9 purchase price for a 20-day rolling period before closing.
After failing to gain regulatory approval, Franco-Nevada said the agreement has been terminated. “Until market conditions stabilize and we can get a fix on the value of our company, we will stay put,” said President Pierre Lassonde. “It’s very discouraging.”
The company retains its royalty holdings on American Barrick Resources’ (TSE) Goldstrike property in Nevada.
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