(Alliance News) - Shares plunged in Richland Resources Ltd on Monday as it extended the longstop date for the sale of its Capricorn sapphire project in Australia to Friday, leading to an increased cash considerations for the project.
Shares in the Bermuda-based gemstone miner were 36% lower at 0.23 pence on Monday in London.
In August, Richland shareholders approved the sale of the project to Fura Gems Inc. Under the initial sale agreement, Fura would pay USD185,000, around CAD125,000 in cash, and issue 4.9 million shares to Richland.
Also included in the deal was Fura paying an option fee of CAD25,000.
However, following the latest deadline extension, Fura and Richland have signed a sixth deed of amendment, which will amend the composition of the purchase price so that Fura will not will not have to pay in shares.
Now Fura will acquire the Capricorn sapphire project for USD1.3 million in cash.
Richland said the consideration amendment was in its best interest, as paying solely in cash would remove the market risk and exposure to transaction costs.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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