Eric Sprott slashes stake in Gran Colombia

In an early warning report filed on Tuesday evening, it was revealed that the Canadian investor has sold approximately 4.33 million common shares of Gran Colombia, representing 7% of those outstanding. The shares were sold at an average price of C$6.50 per share for total consideration of just over C$28.21 million.

The latest transaction follows a smaller sale made by Sprott at the end of July, when he sold 200,000 common shares at C$7.08 per share for total consideration of approximately C$1.41 million.

Sprott originally acquired his position in Gran Colombia beginning late last year when he purchased more than 3.26 million units at C$4.60 per unit in a C$15 million private placement. Each unit comprised one common share and one common share purchase warrant, with an expiry of four years and a conversion price of C$5.40 per share.

He then boosted his position in February when he acquired a further 3.57 million units of the company, with each unit priced at C$5.60 and containing one common share and one common share purchase warrant. The warrants had an expiry of three years and an exercise price of C$6.50 per share. At the close of this financing, Sprott owned 11.24% of the company on a non-diluted basis and 20.2% on a partially diluted basis.

Following his recent share sales, Sprott has now reduced his stake in the company to just 0.2% on a non-diluted basis and 10.1% on a partially diluted basis with 100,000 shares and 6.83 million warrants held.

Gran Colombia’s stock plummeted 7.2% to C$6.12 a share by midday Wednesday following news of Sprott’s divestment. The company’s current market capitalization stands at approximately C$375 million.