Bloomberg News

SEC Suspends Southridge Trading After Kinross Statement

December 28, 2012

Trading in Southridge Enterprises Inc. (SRGE:US) was halted by the U.S. Securities Exchange Commission two days after the mining company said it was forming a partnership with Canada’s Kinross Gold Corp. (K) in Mexico.

The temporary suspension was initiated because of questions regarding the accuracy of statements made by Southridge concerning “certain claims regarding a joint partnership and an arrangement to obtain funding and to change the listing venue for Southridge stock,” the SEC said today in a statement.

Kinross, Canada’s third-largest gold producer, denied a statement from Southridge on Dec. 26 that the two were entering a partnership to develop projects in Mexico. Southridge, based in Dallas, rose as much as 88 percent in over-the-counter trading after it said earlier the same day the companies were working to finalize an agreement for the Cinco Minas and Gran Cabrera properties.

“Kinross wishes to make clear that there is no such joint partnership, joint venture or other similar such arrangement or agreement in place, and nor do we expect there to be such a joint partnership, agreement, acquisition, investment or other equivalent transaction involving Kinross and Southridge in the foreseeable future,” Toronto-based Kinross said in a separate statement yesterday.

A comment in Southridge’s statement attributed to a Kinross employee, Martin Moscosa, “was incorrectly attributed to him,” Kinross said.

‘Signed Agreements’

“Southridge Enterprises does have two signed agreements from Mr. Martin Moscosa,” Southridge said today in an unsigned message sent from an e-mail address listed on its website. The company said it has e-mails confirming Moscosa’s “direct quotation.”

No one responded to voicemail messages left at the Texas phone number listed on Southridge’s e-mail and their latest press release. Steve Mitchell, a Kinross spokesman, said today that he wouldn’t comment on the matter beyond what the company said in its statement yesterday.

The SEC said the suspension in Southridge trading is from 9:30 a.m. New York time today through Jan. 11. The shares (SRGE:US) closed yesterday at 0.6 cent in New York.

Barrick Gold Corp. (ABX) and Goldcorp Inc. (G) are the two largest Canada-based gold producers by sales.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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Companies Mentioned

  • SRGE
    (Southridge Enterprises Inc)
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