Red Deer-based Blue Horizon Industries Inc. (CNSX:BH) has struck a conditional deal to swap its subsidiary Blue Horizon Mining Inc. with Cayenne Gold Mines Ltd. (CNSX:CYN) for shares in Cayenne.
Blue Horizon Industries announced on Monday that the Feb. 2 agreement will result in Cayenne receiving all of the issued and outstanding shares of Blue Horizon Mining in exchange for 43,500,000 common shares in Cayenne, at a deemed price of five cents per share. That would equate to 31 per cent ownership of Cayenne.
Blue Horizon Industries will also convert an outstanding $1.2 million shareholder loan into a convertible debenture of Cayenne, with the principal amount convertible into Cayenne shares at 10 cents per share.
The deal is subject to approval by the Canadian National Stock Exchange and the shareholders of Cayenne.
Blue Horizon Industries owns 74 per cent of Blue Horizon Mining, which is advancing two mining projects (Vermillion Forks Copper and our Kodi Gold) in British Columbia.
Blue Horizon Industries also owns 100 per cent of Blue Horizon Bio-Diesel Inc., which plans to build green biodiesel plants in Canada; and 100 per cent of Blue Horizon Energy Inc., which is exploring for oil and gas in Western Canada and performs dismantling contracts through its Blue Horizon Contracting division.
Cayenne is an exploration mining company with 100 per cent interests in the Windflower and Hixon gold properties in B.C.
“Combining our Vermillion Forks Copper property and our Kodi Gold property with Cayenne’s two quality gold properties makes sound economic business sense,” said Don Allan, president and CEO of Blue Horizon Industries.
He said it will reduce both companies’ overhead and improve their operations.
“The successful completion of this transaction will be the first step towards Blue Horizon becoming a pure play bio-diesel refinery company,” added Allan. “We are confident that the transaction will not only result in greater liquidity and share appreciation for Cayenne’s shareholders but accelerate the development of our joint properties.”