Gold Mountain shares dive as contractors demand payment
Shares plunged by 64%
Gold Mountain Mining shares dived on Wednesday by 64% from C$0.055 to C$0.02, as the Canadian developer announced its chief financial officer resigned and contractors are demanding payment.
Ahead of the announcement, the Canadian Investment Regulatory Organisation temporarily suspended trading on Gold Mountain on Wednesday at 7:44 AM (ET). Trading resumed at 2:30 PM.
Two of Gold Mountain's subsidiaries that hold the Elk Gold project concessions received ‘demand for payment' letters from two of its mine site contractors for around C$5.6 million (US$4.2 million). Around C$4.7 million of that sum is related to expenses incurred by the contractors.
Additionally, Gold Mountain received a notice of enforcement of security from the contractor regarding a previously announced and executed general security agreement.
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Gold Mountain Mining said it is reviewing its legal options and added that while it doesn't have the means to pay, it is attempting to find solutions to work with the contractors.
Operations at Elk Gold had been paused for the holidays and remain paused.
Gold Mountain owns 100% of the 21,187ha Elk Gold project in British Columbia, Canada. It has estimated 806,000oz of gold equivalent of measured and indicated resources and 262,000oz of gold equivalent inferred recourses. A preliminary economic assessment forecasted a post-tax NPV of $231 million.
In the same announcement on Wednesday, Gold Mountain said that its chief financial officer, Simon Buckett, has resigned. The Canadian explorer is looking for a replacement.
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