CanAm Coal Corp.

CanAm Coal Corp.

August 24, 2010 09:01 ET

CanAm Coal Corp. Closes First Tranche of Convertible Debenture Offering

CALGARY, ALBERTA--(Marketwire - Aug. 24, 2010) - CanAm Coal Corp. (TSX VENTURE:COE) ("CanAm" or the "Company") is pleased to announce the closing of a first tranche of $1.965 million of its unsecured convertible redeemable debentures (the "Debentures"). The Debentures will bear interest at the rate of twelve per cent (12%) per annum, payable semi-annually on the last day of August and February, with the first interest payment commencing on February 28, 2011. The Debentures will have a term of 36 months (or 3 years) with a maturity date of August 31, 2013. The Debentures will be convertible at the holder's option into common shares of the Company at any time prior to the maturity date at a conversion price of $0.15 per common share in year one, $0.17 in year two and $0.19 in year three. The Company can redeem the Debentures at any time prior to the maturity date for, at the holder's option, either cash or common shares of the Company issued at the conversion price for that year. The Company can force conversion of the Debentures into common shares if the Company's common shares trade, on a 21 day volume weighted average basis, at or above a 25% premium to the conversion price for that year. The forced conversion of the Debentures is limited to 1/3 of the outstanding Debenture principal amount per year.

Insiders participated in the debenture offering for total gross proceeds of $125,000. In relation to the insiders who participated in the private placement, the Company has determined that there are exemptions available from the various requirements of TSX-V Policy 5.9 and Multilateral Instrument 61-101 for the issuance of these units (Formal Valuation -- Issuer Not Listed on Specified Markets; Minority Approval -- Fair Market Value Not More Than 25 per cent of Market Capitalization). No new insiders were created as a result of this private placement.

Total finders' fees of $126,000 were paid and 1,620,000 finders' warrants were issued with each finder's warrant being exercisable into a common share at a price of ten cents per common share for a period of one year from the date of issuance of the warrant.

The completion of the private placement is subject to final TSX-V approval. The Debentures and any common shares issued upon conversion of the Debentures will be subject to a four month hold period that will expire on December 24, 2010. 

The Company intends to use the net proceeds to fund the Company's buy-out of its partner in RAC Mining LLC, to purchase coal mining equipment and provide for general mine working capital.

About CanAm Coal Corp.

CanAm is a coal marketing and development company focused on growth through the acquisition, exploration and development of coal resources and resource-related technologies. CanAm's main activities and assets include its 49% owned Alabama coal operations, the exclusive rights to a proprietary Coal to Liquids technology which converts coal into liquid fuels (such as oil, jet fuel) at an economical cost with zero airborne emissions and the Buick Coal Project which holds significant coal resources, 188 million tons of indicated and 103 million tons of inferred coal resources, in Colorado, USA (see the technical report entitled "Limon Lignite Project, Elbert County, Colorado, USA," dated October 26, 2007 and filed on SEDAR on November 2, 2007). Other coal and related opportunities continue to be evaluated on an ongoing basis.

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 The Company does not undertake to update any forward-looking information except in accordance with applicable securities law.

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.

Contact Information

  • CanAm Coal Corp.
    Corporate Head Office:
    Timothy J. Bergen
    403.262.3797 or Toll Free: 1.877.262.5888