Amalfi Capital Corporation

May 17, 2010 17:52 ET

CDR Minerals Inc. and Amalfi Capital Corp. Announce Financing and Consequential Amendments to Terms of Amalgamation

CALGARY, ALBERTA--(Marketwire - May 17, 2010) - CDR Minerals Inc. ("CDR") and Amalfi Capital Corp. ("Amalfi") (TSX VENTURE:ALI.P) announced today that CDR intends to raise up to $15,000,000 in a private placement of units (the "Units") at a price of $0.40 per Unit (the "Private Placement"). Each Unit is comprised of one common share of CDR and one common share purchase warrant ("Warrant"). Each whole Warrant will entitle the holder to purchase one common share of CDR at a price of $0.50 for a five year period from closing of the Private Placement.

CDR has engaged Northern Securities Inc. ("Northern Securities") as lead agent to raise up to $8,000,000 on a best efforts basis with Northern Financial Corporation providing a firm commitment for an additional $7,000,000 of the Private Placement, for aggregate gross proceeds of up to $15,000,000, subject to certain conditions including the completion of satisfactory due diligence. Pursuant to the terms of the firm commitment, Northern Financial Corporation has agreed to acquire that amount of Units as is necessary to ensure the minimum financing is at least $7,000,000 and to the extent that orders are received for at least $7,000,000, Northern Financial Corporation shall have no obligation to purchase any Units.

The terms of this Private Placement replace the terms of the brokered private placement previously announced by Amalfi on January 6, 2010.

The Private Placement is being conducted in connection with the previously announced amalgamation between Amalfi and CDR, pursuant to which a wholly-owned subsidiary of Amalfi ("Amalfi Subco") will amalgamate (the "Business Combination") with CDR and continue as one company (the "Resulting Issuer") under the Business Corporations Act (Ontario). The closing of the Private Placement is conditional on the completion of the Business Combination and is expected to close on or about May 28, 2010. CDR intends to use the gross proceeds of the Private Placement to fund its current coal projects in the Central Appalachian Basin in the United States, for future acquisitions, the repayment of debt and for general working capital purposes.

In connection with the Private Placement, Northern Securities received an engagement fee of $20,000 and will be issued 125,000 common shares of CDR at a deemed price of $0.40 per share. On closing, Northern Securities will receive a commission of 8% of the aggregate gross proceeds of the Private Placement and will be issued broker warrants equal to 10% of the number of Units sold pursuant to the Private Placement. Each broker warrant is exercisable into one Unit at the Unit issue price at any time prior to the date that is 60 months from closing. On closing, Northern will be paid an engagement fee of $25,000 pursuant to a separate engagement to advise CDR in connection with the proposed disposition of its Quebec properties.

CDR and Amalfi also announced today that they (together with Amalfi Subco) agreed to make certain amendments (the "Consequential Amendments") to the terms of the amalgamation agreement in respect of the Business Combination, as a result of the Private Placement. In accordance with the Consequential Amendments and in connection with the Business Combination, Amalfi will now consolidate its shares on the basis of one new Amalfi common share ("Amalfi Share") for every three Amalfi Shares (instead of on the basis of one new Amalfi Share for every three and a half Amalfi Shares). As a result, shareholders of Amalfi will receive an aggregate of 3,866,666 common shares (instead of 3,314,285) of the Resulting Issuer after the completion of the consolidation and the Business Combination. In addition, each holder of an Amalfi Share will now receive 0.4285714 of a Resulting Issuer new warrant for each Amalfi Share held (instead of 0.5 of a Resulting Issuer new warrant for each Amalfi Share held). All other terms of the Business Combination are expected to remain the same.

The revised terms of the Business Combination and the Private Placement, as described herein, supersede and replace, as applicable, the description of the Business Combination and the related private placement set out in the Corporation's Filing Statement dated March 29, 2010, which is available on SEDAR. The Corporation intends to work with CDR to complete the Business Combination and Private Placement and will continue to make any additional disclosure related to these transactions as may be required. The Amalfi Shares will be halted for trading pending the release of such additional information.

As previously announced, the Business Combination, if completed, is expected to constitute Amalfi's qualifying transaction for the purposes of Policy 2.4 (the "Policy") of the TSX Venture Exchange Inc. ("TSX Venture"). The completion of the Private Placement and the Business Combination are subject to several conditions including, but not limited to, the receipt of all applicable regulatory approvals, including the approval of the TSX Venture.

About CDR

CDR is a privately held coal exploration and production company, incorporated pursuant to the Business Corporations Act (Ontario), headquartered in Toronto, Ontario, Canada with a regional office in Hazard, Kentucky, U.S.A. CDR is concentrating its efforts on developing producing surface coal mining operations in the Central Appalachian coal producing region of the United States, which includes parts of West Virginia, Virginia, Kentucky, Ohio, and Tennessee.

The completion of the Private Placement and the Business Combination are subject to a number of conditions, including but not limited to, TSX Venture acceptance. There can be no assurance that the Private Placement or the Business Combination will be completed as proposed or at all.

Investors are cautioned that any information released or received with respect to the Private Placement or the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Amalfi nor CDR will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Amalfi and CDR.

The securities of Amalfi being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

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

Contact Information

  • Amalfi Capital Corp.
    Raymond Ludwig
    (403) 585-0450
    CDR Minerals Inc.
    Tom Griffis
    (416) 861-8775