CanAm Coal Corp.
TSX VENTURE : COE

CanAm Coal Corp.

April 11, 2011 09:01 ET

CanAm Coal Completes $11.5 Million Financing

CALGARY, ALBERTA--(Marketwire - April 11, 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 closed its previously announced financing of Subscription Receipts (the "Subscription Receipts") through a brokered private placement of $10,440,000 led by Fraser Mackenzie Limited and including Canaccord Genuity Corp., Salman Partners Inc. and Pope & Company Limited (collectively, the "Agents") and a non-brokered private placement of $1,060,000 for total gross proceeds of $11.5 million. The Agents exercised an over-allotment option and an additional $1.5 million was raised under the previously announced $10 million financing.

The proceeds of the financing will be held in escrow pending the completion of the Acquisition (defined below). In the event of the closing of the Acquisition, the Subscription Receipts will be exchanged, for no additional consideration or further action on the part of the holders of Subscription Receipts, for convertible debentures of CanAm (the "Debentures") in the principal amount of the Subscription Receipts and common share purchase warrants of CanAm (the "Warrants") such that each $1,000 principal amount of the Debentures will entitle the holder to 1,666 Warrants.

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 price of $0.30 per Common Share. 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.

Each Warrant entitles the holder to purchase one additional Common Share for a period of 2 years from the date of issuance of the Warrants at an exercise price of $0.35 per Common Share.

The Agents will be paid a cash commission equal to 7% of the gross proceeds of the brokered financing in consideration for their services rendered in connection with the offering upon the closing of the Acquisition. The Agents were also issued Agent's warrants (the "Agent's Warrants") to purchase an aggregate of 2,436,000 Common Shares at an exercise price of $0.30 per Common Share. The Agent's Warrants will be exercisable at any time after the closing of the Acquisition until 24 months from the closing of the private placement.

CanAm intends to use the net proceeds from the private placement for the purchase of 50% of a private corporation with 3 producing coal mines (the "Acquisition"), 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 Company is currently completing its due diligence of the Acquisition which is scheduled to close by the end of April.

Insiders participated in the private placement for total gross proceeds of $670,000. 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).

The completion of the private placement is subject to final approval from the TSX Venture Exchange. The Subscription Receipts and any securities issued upon exchange or conversion thereof will be subject to a four month hold period that will expire on August 9, 2011.

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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