Restructuring for Central Crude

A proposed restructuring of Central Crude (TSE) would see the junior renamed as River Gold Mines.

River Gold, a wholly owned subsidiary of Western Quebec Mines (TSE), has a 60% interest in the Eagle River gold property in the Wawa area of Ontario, with Central Crude owning the remaining 40%.

The price for the River Gold shares will be satisfied by Central Crude’s issuance of 11.5 million shares worth $18.4 million ($1.60 per share), based on the May 26 closing price of Central Crude’s shares.

The deal would also result in Central Crude’s $4.4-million debt to Western Quebec being converted into an obligation to deliver 8,299 oz. of gold to Western Quebec.

Earlier this year, Western Quebec agreed to pay $9 million to Hemlo Gold Mines (TSE) for the latter’s 60% interest in Eagle River and its approximate 48% interest in Central Crude.

The restructuring requires regulatory and shareholder approval, and the completion by Central Crude of a proposed public offering. The deadline is Sept. 1, subject to extension. A Central Crude shareholders’ meeting is scheduled for June 28.