Update on Proposed $14 Million Brokered Private Placement Financing


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PK:COECF / TSX.V:COE
05/16/2014 [ACCESSWIRE]

Calgary, AB / ACCESSWIRE / May 16, 2014 - CanAm Coal Corp. (COE TSX-V) ("CanAm" or the "Company") is providing an update on its proposed financing. As previously announced, CanAm has engaged Richardson GMP Limited ("RGMP") to act as agent with respect to a proposed "commercially reasonable efforts" $14 million private placement of units ("Units"), each Unit comprised of $1,000 principal amount of 12% non-convertible secured debentures and 670 common share purchase warrants.

As at May 16, 2014, RGMP has indicated to the Company that it has received signed subscription agreements totaling $13 million. The Company is planning to close the financing on or before May 23, 2014. The main purpose of the private placement is to repay CanAm's 10% and 9.5% debentures, which total $12.130 million. The 10% debentures matured on May 8, 2014 and the 9.5% debentures matured on May 9, 2014. Under the 10% and 9.5% debentures, the Company has 21 business day and 10 business day cure periods respectively to repay the 10% and 9.5% debentures upon maturity. The Company intends to close prior to the expiry of these cure periods.

It is anticipated that insiders and close associates will participate in the new debenture for approximately $4.4 million with insiders representing approximately $2.7 million.

The TSX Venture Exchange has conditionally approved the private placement. The subscriptions received by RGMP remain subject to delivery to the Company for acceptance pursuant to the provisions of an agency agreement to be entered into at closing.

Company President & CEO, Jos De Smedt, commented: "We have made great progress on our financing and have achieved the level of subscriptions that will allow us to satisfy our obligations under the 10% and 9.5% debentures. Our goal is now to formally close this financing as soon as possible and continue to focus on our business".

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

For Further Information:

CanAm Corporate Office:

Jos De Smedt, President & CEO

Tel: 403.262.3797

Toll Free: 1.877.262.5888

Email: jdesmedt@canamcoal.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Advisory Respecting Forward-Looking Statements:

This news release contains certain "forward-looking information and statements" within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward-looking information or statements. In particular, this new release contains forward looking statements pertaining to: the terms of the pirvate placement and the Units to be issued thereunder; the anticipated closing date of the private placement; the amount of proceeds from the privaet placement; the ability to satisfy the obligations of the Company under the 10% and 9.5% debentures; the participation of insiders and close associates in the private placement; and the use of the proceeds from the private placement. Various assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this news release.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements reflect management's current beliefs and assumptions, based on information currently available to management. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, many of which are beyond the control of the Company. Among the material factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: that the current subscribers to the private placement may revoke or retract their subscriptions prior to the closing; that the Company and RGMP may not be able to enter into a binding agency agreement satisfactory to both parties or that subscription agreements may not be delivered to the Company for acceptance; the failure of the private placement to proceed on the terms agreed to; the failure to obtain the required approvals for the Offering; the failure to sell all Units offered pursuant to the Offering; failure to close the private placement prior to the end of the default cure periods for the 10% and 9.5% debenturesas well as those factors discussed in or referred to under the heading "Risk and Uncertainties" in the Company's Management's Discussion & Analysis dated April 29, 2014 available at www.sedar.com. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements.

The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information and statements contained in this news release speak only as of the date of this news release, and the Company assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.

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