Shares of Forsys Metals Corp. plummeted Wednesday after the uranium miner said Industry Canada had put the proposed takeover of the company by George Forrest International Afrique SPRL on hold.
Trading in shares of Forsys had been halted on the TSX earlier Wednesday pending an announcement. Trading later resumed and Forsys shares closed down 82 cents or 13 per cent at $5.40 on volume of more than three million shares.
Forsys says it only learned of the action by Industry Canada on Tuesday evening after George Forrest International gave it a copy of a letter it had received from the government department, which reviews foreign takeovers of Canadian companies under the Investment Canada Act.
"The notification states that GFI is prohibited from implementing the investment pending further notice from Industry Canada," Forsys said in a news release.
Forsys said it would issue a further news release once it has been advised by GFI of "the full impact, if any, of the notification and determined the effect on the plan of arrangement with GFI."
Shares in Forsys soared more than a third to $6.46 earlier this month on news that GFI had signed a binding investment arrangement allowing it to complete the takeover. The two companies had announced a $7-per-share friendly offer last November.
Forsys, which has about 79 million shares outstanding, said in its Aug. 4 announcement that it expected the takeover by the privately held GFI to close Aug. 17.
Forsys owns and has a mining licence for the Valencia uranium deposit in the southwest African country of Namibia, a project estimated to contain 61 million pounds of uranium oxide.
The Forrest Group, founded in 1922 in what now is the Democratic Republic of Congo, has assets in engineering, mining, manufacturing and construction in Africa, Europe and the Middle East.