Gediminas Jasionis
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New Market Valuation Still Settling for Ethiopian Potash Corp. (CVE:FED)

by Gediminas Jasionis Mar 15, 2011
FED_chart.pngEthiopian Potash Corp. (CVE:FED) is tanking after the stock opened with a massive premium as IIROC lifted the trading halt.

Trading of FED, formerly Panorama Resources Ltd., was halted since October 2010. The company underwent drastic changes resulting from a reverse takeover and amalgamation between EPC and Panorama Resources. Panorama's stock will be delisted from the exchange altogether.

No other major changes were announced. FED rolled down 8% on Monday and remains at 2.7 times the pre-merger level. Trading activity decreased significantly on the second day of trading, but still beats the average.

Ethiopian_Potash_logo.jpgPrior to the takeover, Panorama had little business activities and held on to its single property at Ketchum Lake in northwestern British Columbia. The business retained considerably small losses ($167k for nine months ended June 30, 2010), as well as little working capital ($282k reported for June, 2010).

Shareholders of both the private Ethiopian Potash and the public Panorama approved this amalgamation in a meeting held on January 28, 2011. Following the approval from the exchange and the regulators, the new entity became a subject to receive $11 million worth of subscription receipts, convertible into units of common shares and warrants at 50 cents per piece.

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