Buffalo Gold (TSX: V. BUF, Stock Forum) announced Monday that its memorandum of understanding with China Railway Group Limited for investment in the company and its projects in Papua New Guinea and Australia has terminated.
The company also reported that the assets of its 90% owned subsidiary, Sardinia Gold Mines SpA, will be placed in liquidation and the company will lose its Furtei and Osilo mineral properties, processing plant and related assets.
The move comes due to lack of funding and inability to service debts for the Furtei operation in Sardinia. Buffalo says it still holds its exploration tenements over Monte Ollesteddu.
Buffalo Gold notes that its CEO Brian McEwen will be replaced by Damien Reynolds, the company's executive chairman.
Trading of the company's shares was halted Monday morning, but when it resumed, shares of Buffalo Gold tumbled more than 16% to 2.5 cents.
Earlier this morning, calgarydave commented: “So what happened to the $3 million from CRRC.That must be due now and was to be used to complete feasibility at Furtei. Closure of Furtei would not result in this Halt.Maybe they have good news.Maybe they got the money. They have their finger in a lot of pies.I would be shocked if they cannot survive this cash crisis. Lets think positive and hope for some good financing news[sic].”
Copyright 2008 Stockhouse
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