CanAm Coal Corp.
TSX VENTURE : COE

CanAm Coal Corp.

September 09, 2010 09:01 ET

CanAm Coal Corp. Announces Closing of Convertible Debenture Offering

CALGARY, ALBERTA--(Marketwire - Sept. 9, 2010) - CanAm Coal Corp. (TSX VENTURE:COE) ("CanAm" or the "Company") is pleased to announce the closings of the second and third tranches of an aggregate of $535,000 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.

For the second and third tranches, total finders' fees of $28,350 were paid and 364,500 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.

Together with the first tranche, the Company issued an aggregate of 500 Debentures for total gross proceeds of $2.5 million.

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 January 1, 2011 for the second tranche and January 9, 2011 for the third tranche of the Debentures.

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 www.sedar.com. 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:
    Linden Swensen, President
    403.262.3797 or Toll Free: 1.877.262.5888
    lswensen@canamcoal.com