Canhorn selling Citadel shares to investor group

Toronto-based Canhorn Mining has announced a plan to sell almost all of its 34.5% interest in Citadel Gold Mines to a group of Toronto investors.

While Citadel is the 100%-owner of a Wawa, Ont., gold property (and 850-ton-per-day mill) which is scheduled to be in production this year, Canhorn President Bernard MacIsaac says the agreement is amicable.

“We feel that the price we got was equal to what we would have earned during the life of the mine,” MacIsaac told The Northern Miner.

Under the plan, the first block of 1.6 million Citadel shares is being sold at $2.50 per share to a group of investors including Dr Bernard Sherman, president of a drug manufacturing company called Apotex Toronto.

The group had previously bought a substantial block of shares from Prairie Pacific Energy (which held 22.2%) in the open market. Under the agreement, the Sherman group has a 1-year option on an additional 475,000 shares of Citadel at $2.50 per share.

The Sherman Group has also been granted a 2-year option to acquire the balance of Canhorn’s 2,871,400 Citadel shares, with the exception of 100,000 shares, at a price of $3.50 during the first year and $4.50 during the second.

At the same time, Canhorn’s major shareholder, Great Horn, Inc. of New York, has agreed to buy 324,950 Canhorn shares, at $2.50 per share, from five members of the Sherman Group.

That agreement brings Great Horn’s Canhorn holdings up to about one million shares or 30%.