18th Jan 2016 10:04
LONDON (Alliance News) - Condor Gold PLC on Monday said it has put an end to its strategic review and formal sale process, as the company does not see an "acceptable premium" to its current share price being achieved in the short term.
Condor Gold, which began the strategic review on September 4, had been looking at forming joint ventures or even pursuing a sale of the entire business, until terminating the offer period, having had hired Cormark Securities Inc to help it with the move.
The company said negative market sentiment towards junior gold exploration companies and the natural resource sector in general was behind the 65% drop in the value of its shares since that review was revealed to the market.
"The board's view is that the fall in the share price does not reflect and indeed significantly undervalues Condor's key asset, La India Project in Nicaragua and has decided to terminate the formal sale process, which resulted in an offer period under the [UK takeover] code," Condor Gold said.
"Condor's current market capitalisation is equivalent to circa USD5.0 per resource ounce gold in the ground compared to an average sale price over the past 18 months, estimated by Cormark, of USD56.0 per resource ounce gold in the ground for similar gold mineral resources. Given that any potential offer for the company would be judged in the context of a premium to the share price; the board does not see an acceptable premium to the current share price being achieved in the short term, hence the decision to end the formal sale process," Condor added.
The company said it had GBP1.1 million in cash at the end of 2015, based on unaudited figures.
Shares in Condor were down 6.8% at 17.70 pence on Monday morning.
By Samuel Agini; [email protected]; @samuelagini
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