CanAm Coal Corp.
TSX VENTURE : COE

CanAm Coal Corp.

March 15, 2011 09:51 ET

CanAm Coal Announces $10 Million Private Placement Financing

CALGARY, ALBERTA--(Marketwire - March 15, 2011) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

CanAm Coal Corp. (TSX VENTURE:COE) ("CanAm" or the "Company") is pleased to announce that it has engaged Fraser Mackenzie Limited to lead a syndicate of agents (collectively, the "Agents"), to sell by private placement on a best efforts basis subscription receipts (the "Subscription Receipts") of the Company for gross proceeds of up to $10 million (the "Offering").

The proceeds of the Subscription Receipt Offering will be held in escrow pending the completion of the Purchase (defined below). The Subscription Receipts will be exchanged on a value for value basis for convertible debentures of CanAm (the "Debentures") and common share purchase warrants of CanAm (the "Warrants") upon closing of the Purchase for no additional consideration or further action on the part of the holder of Subscription Receipts.

The Debentures mature 36 months from the date of issuance of the Debentures and are convertible, at the option of the holder, into common shares ("Common Shares") of the Company at a conversion rate of 3,333 Common Shares per $1,000 principal amount of Debentures. The Debentures will be unsecured and will bear interest at a rate of 9.5 percent per year, payable semi-annually. The Company shall have the right to require conversion of the Debentures any time after one year if the volume weighted average price of the Common Shares over the preceding 20 trading days is at $0.60 or higher.

In addition to Debentures, the Subscription Receipts will also be exchanged for Warrants such that each $1,000 principal amount of Debentures will entitle the holder 1,666 Warrants. Each Warrant entitles the holder to purchase from the Company one Common Share for a period of 2 years from the date of issuance of the Warrants at $0.35 per Common Share.

The Company will also grant the Agents an option to increase the size of the Offering by up to an additional $1.5 million up to 48 hours prior to the closing date of the Offering.

CanAm intends to use the net proceeds from the Offering for the purchase of 50% of a private corporation with 3 producing coal mines (the "Purchase"), as previously described in the Company's press release dated February 9, 2011, for the exploration and development of the Company's mineral properties and for general corporate purposes.

The closing date of the Offering is expected to occur on or about April 5, 2011 and is subject to execution of a definitive agreement relating to the Purchase and receipt of all necessary regulatory approvals.

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 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.

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