Red Deer-based Blue Horizon Industries Inc. (CNSX:BH) has announced that its subsidiary Blue Horizon Bio-Diesel Inc. has entered into an agreement with Cielo Gold Corp (CNSX: CMC).
Under the deal, Cielo will buy certain assets and liabilities of Blue Horizon Bio-Diesel for $4.25 million, with this amount payable in the form of two convertible debentures issued by Cielo. Each debenture will be payable in cash or common shares of Cielo.
Don Allan, president and CEO of Blue Horizon Bio-Diesel, has agreed to be appointed CEO of Cielo upon closing of the agreement, and to serve on the board of Cielo. Closing is expected on March 29.
Blue Horizon Bio-Diesel’s assets include a renewable fuel oil demonstration plant that is being assembled and is expected to be ready for operation later this month. A release issued by Blue Horizon Industries said Cielo intends to complete upgrades to produce a low-sulphur highway-grade diesel that will meet Canada’s mandated two per cent renewable content for diesel.
It added that Cielo hopes to begin commercial production of renewable diesel in 2013, using municipal waste and used oil.