CGFID - Colorado Goldfields Announces FINRA Approval of 5000
:1 Reverse Stock Split; Trading Symbol "CGFID" for 20 Business Days; Colorado Division of Reclamation, Mining, and Safety Approved Reclamation Work of Tailings Ponds Commences GOLD STOCKS
LAKEWOOD, CO, Sep 13, 2012 (MARKETWIRE via COMTEX) -- Colorado Goldfields Inc. (OTCQB: CGFID) (OTCQB: CGFIA) announces that the Company has received approval from the Financial Industry Regulatory Authority, Inc. ("FINRA"), of its 5000:1 reverse stock split. Beginning September 12, 2012, the symbol will be "CGFID." After 20 business days, the symbol will revert to the original symbol, "CGFIA." The post-split shares are assigned the new CUSIP number of 19647Y609. Transmittal letters will be sent to all shareholders of record affected by this reverse stock split by the Company's transfer agent, Corporate Stock Transfer of Denver, Colorado.
The Board of Directors believes that the current market price of the Company's Class A Common Stock is impairing its acceptability to certain investors, clearing firms, and other members of the investing public, and has approved the reverse split in anticipation that it could result in a significant improvement in the per share price of the stock. C. Stephen Guyer
, Chief Financial Officer
of Colorado Goldfields, stated, "We are effecting a reverse stock split to better align the stock price with the Company's accomplishments and operational objectives. Further, we have performed extensive multi-variate analysis surrounding this action. We believe this transaction will broaden our shareholder base, increase the appeal of the stock to investors, and help facilitate electronic transactions of our stock through DTCC. While reverse splits are sometimes viewed as a negative event, we strongly believe that this reverse split will provide benefits to our shareholders by improving trading accessibility and liquidity, thereby enhancing long-term shareholder value."
On September 12, 2012, every 5,000 shares of Class A common stock of CGFIA will automatically combine into one share of Class A common stock. The reverse split will reduce the number of shares of issued and outstanding Class A common shares from approximately 28.2 billion pre-split to approximately 5.7 million post-split. The number of authorized shares of Class A common stock will be reduced from 35 billion to 7 million. Proportional adjustments will be made to Colorado Goldfields' convertible notes and equity compensation plans. All fractional shares will be rounded up to the nearest whole number. The Reverse Split will not negatively affect any of the rights that accrue to holders of CGFIA common stock or common stock equivalents. The reverse split is not a taxable event to existing stockholders.
As part of the on-going reclamation of the exiting tailings ponds at the Company's Pride of the West Mill, as approved by the Colorado Division of Reclamation, Mining and Safety under Technical Revision No. 11, the Company is proceeding with evaporation of the remaining waste water contained in the mill drain pond and cell 1A of the existing tailings ponds. Both of these facilities are being reclaimed in accordance with the technical revision, which was first approved on June 27, 2011.
The mill drain pond contained approximately 90,000 gallons of water and Cell 1A contained approximately 1,000,000 gallons of water. Since August 12, 2012, approximately 800,000 gallons of water has been evaporated -- 90% from the mill drain pond and 75% from cell 1A. Evaporation of the water, the first step in reclaiming the facilities, is expected to be completed by September 30, 2012. Following evaporation of the water, the old liners will be breached and the areas backfilled with reclamation materials. Three specialized dewatering 2 x 2 pumps running at 3,450 rpm and 20 water sprayers are being utilized to evaporate the water.