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Greystar shares spring back to life as Colombian decision reversed

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Judi Lynn Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-01-10 02:26 AM
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Greystar shares spring back to life as Colombian decision reversed
Greystar shares spring back to life as Colombian decision reversed
Stock jumps 44%

Peter Koven, Financial Post
Published: Tuesday, June 01, 2010

After five weeks of panic, Greystar Resources Ltd. is back where it started. Now it has to move to the next stage: build a gold mine in northern Colombia that has been more than 15 years in the making.

Vancouver-based Greystar is trying to develop Angostura, a massive undeveloped deposit expected to produce more than 500,000 ounces of gold a year over 15 years. Given its size and scale, it is a key proof point for mining in Colombia, an emerging gold mining district where few foreign companies have tread.

Greystar appeared to be proceeding well until April 26, when it shocked investors by announcing that it was subject to changes in the government's mining code that appeared to ban mining in Colombia's "Paramo" ecosystem. Angostura infringes on that area.

The stock immediately plunged more than 40% as investors got a harsh reminder of Colombian political risk.

But in a rare occurrence for a junior mining company, Greystar got the decision reversed. Quickly.

Yesterday, the company confirmed that its appeal of the decision was successful, and that the government reinstated its environmental impact assessment. That means it can continue with its prior mine plan.

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