Blue Horizon Industries Inc
CNSX : BH

Blue Horizon Industries Inc
Cayenne Gold Mines Ltd.
CNSX : CYN

February 06, 2012 08:25 ET

Blue Horizon Mining and Cayenne Execute Letter of Intent to Acquire Blue Horizon Mining

CALGARY, ALBERTA--(Marketwire - Feb. 6, 2012) - Blue Horizon Industries Inc. ("Blue Horizon") (CNSX:BH) and Cayenne Gold Mines Ltd. ("Cayenne")(CNSX:CYN) are pleased to announce that Blue Horizon Mining Inc. ("BH Mining"), the 74% owned subsidiary of Blue Horizon, and Cayenne Gold Mines Ltd. ("Cayenne") have entered into a Letter of Intent ("LOI") dated February 2, 2012, with respect to the acquisition of BH Mining by Cayenne. Pursuant to the terms of the LOI, Cayenne will acquire 100% of the issued and outstanding shares of BH Mining in exchange for the issuance of 43,500,000 common shares of Cayenne at a deemed price of $0.05 per share (the "Proposed Transaction").

Prior to the closing of the Proposed Transaction, Cayenne will complete a non-brokered private placement ("Private Placement") of securities at a price of $0.05 per security for gross proceeds of not less than $650,000, the terms of which are described in more detail below. Closing of the Proposed Transaction is subject to a number of conditions including negotiation and execution of a definitive agreement, receipt of all required approvals, including approval of the Canadian National Stock Exchange and the shareholders of Cayenne, the completion of the Private Placement, and the completion of the audit and filing of the annual financial statements of Cayenne for the year ended September 30, 2011.

Pursuant to the Proposed Transaction, Cayenne would acquire all of the issued and outstanding shares of BH Mining in exchange for the issuance of 43,500,000 common shares of Cayenne, and Blue Horizon would thereby indirectly acquire an initial 31% ownership of Cayenne. The Cayenne shares issued will be subject to escrow requirements pursuant to the rules of the Canadian National Stock Exchange. In addition, Blue Horizon will convert its outstanding shareholder loan in the amount of $1,200,000 into a convertible debenture of Cayenne maturing on December 31, 2012, with the principal amount being convertible into Cayenne common shares at $0.10 per share. Following the Proposed Transaction, a new board team and management team will be elected. Upon completion of the Proposed Transaction, the new management team anticipates conducting a non-brokered private placement of common shares and common shares issued on a flow-through basis for proceeds of up to $2,500,000.

Don Allan, President and CEO of Blue Horizon stated "Combining our Vermillion Forks Copper Property and our Kodi Gold Property with Cayenne's two quality gold properties makes sound economic business sense. We are looking forward to being able to access flow through funding that we were unable to access in the past as a result of our complex corporate structure. This transaction will reduce both companies overhead and on a go forward basis allow more money to go into the ground that will help to prove up our joint properties. The successful completion of this transaction will be the first step towards Blue Horizon becoming a pure play bio-diesel refinery company. 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."

Alex Briden, President & CEO of Cayenne stated "As a result of the management of Cayenne focusing on the Proposed Transaction with BH Mining, Cayenne has not yet filed its audited annual financial statements for the year ended September 30, 2011 and has been listed on the list of defaulting issuers by the British Columbia Securities Commission however we expect the audit to be completed over the next 30 days. Due to the late filing of the annual financial statements, the shares of Cayenne will be cease traded until we are able to file the annual audited financial statements and MD&A with securities regulators and fulfill any other requirements imposed by those regulators to have the cease trade order revoked".

About Cayenne Gold Mines Ltd.

Cayenne Gold Mines Ltd. is an exploration mining company with 100% interests in the Windflower and Hixon gold properties located in British Columbia. Additional information regarding Cayenne can be found in their recent filings with SEDAR as well as the information maintained on their website http://www.cayennegoldmines.com/

About Blue Horizon Industries Inc.

Blue Horizon Industries Inc. is a diversified industrial company that operates through three subsidiary companies; Blue Horizon Bio-Diesel Inc. - 100% owned ("BH Bio-Diesel"), Blue Horizon Energy Inc. - 100% owned ("Blue Horizon Energy") and Blue Horizon Mining Inc. - 74% owned ("BH Mining"). Blue Horizon Contracting ("BH Contracting") and BH Energy are wholly-owned divisions of Blue Horizon Energy. BH Contracting is currently bidding on new dismantling contracts, while BH Energy is exploring for oil and gas in Western Canada having participated in 4 test wells in 2011. BH Mining is advancing two mining projects in British Columbia and BH Bio-Diesel has an exclusive sub-license agreement to build green bio-diesel plants in Canada.

The shares of the parent company, Blue Horizon Industries Inc., are listed to trade on the Canadian National Stock Exchange ("CNSX") under the symbol BH.

This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the company's disclosure documents on the SEDAR website at www.sedar.com. The company does not undertake to update any forward-looking information except in accordance with applicable securities laws.

Neither the Canadian National Stock Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian National Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Blue Horizon Industries Inc.
    Donald Allan
    President & CEO
    (403) 340-0864

    Cayenne Gold Mines Ltd.
    Alex Briden
    President & CEO
    (604) 687-8623