The junior magnesium explorer said its agreement with Maryland-based Gryphon Enterprises has been terminated due to a payment failure.
Junior miner West High Yield Resources (TSXV:WHY) has terminated a $750-million deal to sell its magnesium assets to Gryphon Enterprises, the company said on Wednesday (November 8).
Maryland-based Gryphon was unable to pay the required $500,000 deposit by the deadline set in the agreement, West High Yield explained.
“Although the company is disappointed that the agreement was terminated, it continues to believe, based on testing done to date, that the assets have significant value,” Calgary-based West High Yield said in a statement.
In October, the magnesium explorer announced the sale of its interests in the Record Ridge South, Midnight and OK mineral properties in BC, Canada for $750 million. The arrangement was set to be one of the biggest mining deals of the year.
The company’s share price spiked almost 1,000 percent after the news, jumping from C$0.36 on October 4 to close at C$2 on October 5. Because of the magnitude of the increase, the Alberta Securities Commission launched an investigation and trading was halted on October 6.
Last Friday (November 3), West High Yield warned investors about “the significant conditions and contingencies” of the transaction, saying that Gryphon had yet to obtain financing for the deal.
This week, the Investment Industry Regulatory Organization of Canada (IIROC) said investors won’t see their trades reversed, according to a letter sent to a shareholder. The letter was obtained by Bloomberg and confirmed by an IIROC spokesperson.
The disclosure from West High Yield “while highly conditional on a number of factors, did not contain information which was either misstated or inaccurate,” IIROC said. IIROC has the authority to reverse trades that violate Universal Market Integrity Rules, Debra Haggarty, senior complaints and inquiries specialist at IIROC, said in the letter.
West High Yield intends to continue its ongoing efforts to secure mining and rock quarry permits for its magnesium properties. It is in discussions regarding when its shares will resume trading.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: West High Yield Resources is a client of the Investing News Network. This article is not paid-for content.