Vancouver-based International Mahogany (TSE) has agreed to acquire a 33% initial stake in Columbia Gold Mines (VSE) through a private placement deal. Under an agreement, Mahogany is acquiring one million units of Columbia Gold from treasury at 50 cents per unit, each unit consisting of one common share and a warrant entitling the holder to purchase an additional common share at 50 cents for up to one year.
When the transaction is completed, Mahogany will own 2.4 million of Columbia’s 7.5 million shares outstanding. Once the warrants are exercised, the company’s interest will increase to 4.7 million.
Previously known as Esperanza Explorations, Columbia can earn a 70% stake in the Spectrum gold property in British Columbia’s Iskut River area by spending $2.95 million on the property.
Recent drilling on Spectrum’s QC and Porphyry zones has returned a number of encouraging intersections including 33 ft. of grade 0.36 oz. gold per ton.
Mahogany says it is acquiring the shares purely for investment purposes. Columbia is based in Vancouver.
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