Share issue for Lacana

Hot on the heels of its purchase of 51% of Mascot Gold Mines, Lacana Mining has reached two agreements for the sale of five million common shares.

In one deal, Lacana has made an agreement with Gordon Capital Corp, Loewen, Ondaatje, McCutcheon and Co. Ltd. and Merrill Lynch Canada Inc. for the issue and sale of 3.75 million shares at $12 per share. And in the other deal, Alexanders, Laing and Cruickshank of London, England, has agreed to subscribe, or obtain subscribers in the United Kingdom, for 1.25 million shares at the same price.

Proceeds of the share issue are to be used to reduce the debt incurred by the Mascot purchase. Lacana acquired 9,959,596 shares of Mascot from Royex Gold Mining for $150 million ($65 million in cash, a $25-million promissory note and $60 million in preferred shares of a Lacana wholly-owned subsidiary. The preferred shares are convertible into Lacana common shares at $10 per share.)

After the share issue, Royex will own approximately 26% of Lacana, but could end up with approximately 44% of Lacana should it convert the preferred shares into common stock.

The purchase of Mascot boosts Lacana’s annual share of gold production to approximately 125,000 oz.

Lacana is engaged in the exploration for, and the mining and processing of, precious metals in Canada, the United States and Mexico. It is also involved in the exploration for, and mining and processing of, industrial minerals in Canada, and is engaged in oil and gas exploration in Canada and the U.S.