Shares in Mercator Minerals Ltd lost nearly a third of their value on Tuesday as the Canadian miner's proposed $100 million takeover by a company owned by Russian tycoon-turned-politician Mikhail Prokhorov looked to be in jeopardy.
Mercator said earlier on Tuesday that Intergeo MMC, part of Prokhorov's Onexim Group, had informed the small copper miner that it doesn't expect to extend the closing date of the deal announced in December beyond August 1.
However, Mercator said on July 2 that the Russian Federal Anti-Monopoly Services (FAS) has requested a two-month extension to review the transaction.
If FAS has not completed its review by August 1, the proposed transaction will not go ahead unless the parties otherwise agree, Mercator said on Tuesday.
"We are extremely disappointed in Intergeo's decision, especially in light of the strong operations and operational cash flows being generated by Mineral Park mine," Mercator President and Chief Executive Bruce McLeod said in a statement.
A spokesman for Intergeo could not immediately be reached for comment.
McLeod said Mercator will consider its alternatives over the coming weeks. Intergeo has told Mercator it is prepared to waive the non-solicitation provisions in the Dec. 12 agreement to allow the miner to fully consider its alternatives, Mercator said.
Shares in Mercator fell as much as 31 percent to 5.5 Canadian cents on the Toronto Stock Exchange.
Mercator owns the Mineral Park copper mine in Arizona as well as two base metals projects in Mexico.
(Reporting by Nicole Mordant in Vancouver; Editing by Nick Zieminski)