Tahera shares fall in first trading after takeover announced

Shares in Tahera Diamond Corp., owner of the Jericho mine in Nunavut, fell sharply in their first trading following the announcement of a takeover deal for the mining company, which has been restructuring under creditor protection.

Tahera stock was off two cents or 57 per cent at 1.5 cents with more than two million traded Monday morning.

The junior diamond miner said Friday it has signed a deal with a Vancouver-based group to buy the company. Financial terms of the deal were not immediately available.

Under the deal, a privately held company owned by a group of resource explorers and developers will pay cash that will be used for payments to Tahera's creditors and in turn receive 100 per cent of the equity of the company.

"(However) the cash consideration being paid by the plan sponsor under the agreement is insufficient to pay all of the claims of creditors of the company in full," Tahera said in a statement.

"It is currently contemplated that if the restructuring plan is ultimately approved and implemented, the existing shares of the company will be cancelled or acquired by the plan sponsor which will ultimately acquire the company."

No value was expected to remain for existing shareholders.

Tahera filed for protection under the Companies' Creditors Arrangement Act in January and has been working on a restructuring plan since then.

Mining was suspended at its Jericho Mine earlier this year to conserve cash and fuel. The mine is located 360 kilometres southwest of Cambridge Bay, in the Kitikmeot region in western Nunavut. It began operating in 2006.